Mylan takes formal offer directly to Perrigo shareholders

Mylan said Monday that it officially commenced its formal offer to acquire all outstanding ordinary shares of Perrigo for $75 in cash and 2.3 Mylan ordinary shares for each Perrigo share, after announcing its intention to do so last week. Mylan noted that if the transaction, which is valued at around $27.1 billion, is completed, Perrigo shareholders will own approximately 40 percent of the combined company.

Robert Coury, executive chairman of Mylan, remarked "we are highly confident that the majority of Perrigo shareholders will support this full and compelling offer," which expires on November 13, "particularly in the absence of any competing interest in this asset and the significant uncertainties, execution risk and lengthy timetable associated with Perrigo's standalone strategy."

A majority of Mylan shareholders backed going ahead with the proposed takeover at an extraordinary general meeting last month, contrary to advice from Institutional Shareholder Services, which had cited "unreasonable uncertainties" about the bid. Abbott, which holds a 14.5-percent stake in Mylan, has also expressed that it would vote in favour of the deal.

Meanwhile, Perrigo advised its shareholders to take no action regarding the unsolicited exchange offer pending its board's review. However, the company had previously rejected Mylan's offer of $75 in cash and 2.3 Mylan ordinary shares for each Perrigo share in April, concluding that it had a lower value than an earlier non-binding proposal of $205 per share in stock and cash.

In addition, Perrigo CEO Joseph Papa previously hinted that his company has options to thwart a takeover by Mylan, including pursuing acquisitions of its own. Mylan, meanwhile, has accused Perrigo of making "misleading" statements about the offer that may have also violated Irish Takeover Panel rules.

Analysts previously suggested that Mylan could have "less leverage" to pursue a takeover of Perrigo after Teva halted its pursuit of the company in favour of buying Allergan's global generic pharmaceuticals business for $40.5 billion. Meanwhile, Mylan CEO Heather Bresch has said her company has other options if it fails to acquire Perrigo.

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