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Wednesday, 09 September 2015 10:42

Mylan launching hostile bid Sept. 14 for Perrigo

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The battle for Perrigo begins next week.

Mylan N.V., nearly five months after publicly stating it wants to acquire the company, plans to take a buyout proposal, now estimated at $27.1 billion, directly to Perrigo Co. plc shareholders Sept. 14 in a hostile takeover bid.

Shareholders at Perrigo will have until Nov. 13 to decide whether to sell their shares to Mylan, a maker of generic drugs that is domiciled in the Netherlands but run from outside Pittsburgh.

“Perrigo shareholders should understand that the final outcome rests solely with them, not with Perrigo’s management or board. You and your board are now unable to stop the combination,” Mylan Executive Chairman Robert Coury wrote in a Sept. 8 letter informing Perrigo Chairman CEO Joe Papa that the tender offer was about to begin.

“In fact, at this point Perrigo's management has no role to play in the process, and the only role the Perrigo board has is to issue its recommendation to Perrigo shareholders,” Coury said, “We have been clear from the very beginning that we were going to make this compelling combination a reality, and despite your efforts to confuse and cast doubt every step of the way, we have done — and will do — every single thing we said we were going to do.”

Mylan is offering $75 in cash and 2.3 of its shares for every Perrigo share, or the equivalent of $185.52 per share based on the Sept. 4 closing price for a transaction value of $27.1 billion.

Directors at Perrigo have repeatedly rejected the offer as significantly undervaluing the company and Papa has consistently told brokerage analysts and investors that the company can do better on its own, especially with 2014’s acquisition of Omega Pharma in Belgium that can drive growth in Europe.

Mylan last month lowered the threshold for a deal and said that it could run Perrigo as a controlled subsidiary if it’s able to acquire a controlling interest in the company but less than 80 percent of shares, a level at which it could force the remaining shareholders to sell. Acquiring more than 50 percent of shares would still enable Mylan to appoint its own directors and control the board.

Perrigo did not respond to Mylan’s announcement that it planned to launch its tender offer Monday, although Papa last month sharply criticized the lowering of the threshold for doing a deal.

In a letter to Perrigo shareholders prior to an Aug. 28 vote by Mylan shareholders to proceed with the tender offer, Papa wrote that acquiring a majority share but not enough to force minority shareholders to sell and gain full control of the company, “would make any synergy gains more difficult to achieve, and thereby make a bad deal potentially worse — both for those who tender and those who choose to remain.”

Mylan disputes that assertion and in its letter this week made another offer to Perrigo to talk about how to structure a sale, although Coury wrote that the company will not raise its offer.

“… even though you and your board's refusal to negotiate … has resulted in the window for price discussions having closed, price can no longer be the subject of discussion or negotiations and our current offer is final and will not be increased (absent another potential offer emerging), as we head down the home stretch of completing this transaction, we at Mylan would still graciously welcome the participation of you and your management in the creation of this powerful, one-of-a-kind, value-added health care company, which will better serve our customers and patients around the world,” Coury wrote.

“Our door remains open.”

Read 698 times Last modified on Monday, 28 September 2015 11:05

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