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Mylan to relaunch $27.1bn hostile takeover of Perrigo

Published on 10/09/15 at 10:36am
Mylan building
Mylan has seen several previous bids rejected by the Perrigo board

Mylan is to make yet another hostile $27.1 billion bid for Irish over the counter drug manufacturer Perrigo on Monday, as the wave of M&A activity in the industry rolls on. 

The cash and stock offer will be made directly to Perrigo shareholders, bypassing the board, and comes as US-based Mylan seeks to expand its generics business.

Mylan has had three previous bids for the company – culminating in a $34.1bn offer – rejected by Perrigo in April. Mylan has itself been the subject of interest from Teva in the summer, before the Israeli company looked elsewhere with a $40.5 billion takeover of Allergan’s generics unit.

It now appears that in attempting to keep pace with its rival and former suitor, Mylan is taking its offer directly to Perrigo shareholders. 

If they accept, Perrigo investors will receive $75 in cash and 2.3 Mylan shares for each Perrigo share acquired. For a deal to go ahead, more than 50% of Perrigo shareholders have to be in favour.  

Mylan executive chairman, Robert Coury, has previously spoken of the “strategic rationale and potential for value creation inherent in the combination of Mylan and Perrigo.”

In a letter delivered to Perrigo shareholders on September 8, Coury told Perrigo chief executive Joseph Papa that Mylan shareholders had delivered a clear mandate for the deal, that there was a “clear and direct pathway” available to Perrigo shareholders to conclude it, and that the Perrigo board was unable to play a role in the process.

If Mylan fails to convince Perrigo’s shareholders however, Papa has hinted that a bidding war could develop, amidst interest in the Irish firm from other companies.

Joel Levy

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