M&A drama continues as Mylan rejects Teva
pharmafile | April 28, 2015 | News story | Sales and Marketing | M&A, MA, Mylan, Perrigo, Teva, bids, generics, takeovers
Mylan has firmly rejected Teva’s acquisition bid, even though its own bid for Irish firm Perrigo has also been turned down.
Teva made an offer to buy the US generics firm for around $40 billion last week, in a move that would create the world’s largest generic company
However, in a statement, Mylan’s executive chairman Robert Coury says that the offer “grossly undervalues the firm, and would require our shareholders to accept what we believe are low-quality Teva shares in exchange for their high-quality Mylan shares in a transaction that lacks industrial logic and carries significant global antitrust risk”.
He adds: “We believe that the proposal does not address the serious challenges of integrating two fundamentally different and conflicting cultures under a Teva board and leadership team with a poor record of delivering sustainable shareholder value.
“We believe that these challenges would make it very difficult to generate value from this combination for our shareholders.”
Mylan itself is in the process of trying to buy over-the-counter specialist Perrigo for $28 billion, and Coury says that the company’s board believes Teva’s move is “only a mere attempt to frustrate and distract us from our business plan and strategy”.
However Mylan has been rejected for a second time by Perrigo, who also cited undervaluing.
In a statement the Irish firm says: “The board previously concluded that Mylan’s unsolicited proposal of $205.00 per share significantly undervalued the company and its future growth prospects and was not in the best interests of Perrigo’s shareholders.”
Perrigo also argues that the most recent proposal was actually lower in value than the previous one, when considering Mylan’s lower share prices before rumours of the Teva offer began to spread.
Despite Mylan raising concerns about anti-trust risk from a Teva takeover, the firm has said its potential acquisition of Perrigo would produce a “global pharmaceutical leader with an unmatched commercial and operating platform”.
Last month saw the closure of another major generics merger as Sun Pharma completed its acquisition of Ranbaxy, creating the fifth largest generics firm in the world and the largest pharmaceutical company in India.
Yesterday Mylan gained a positive opinion for generic versions of blockbusters Lyrica (pregabalin) and Cymbalta (duloxetine) in the latest round of recommendations from the EMA’s Committee for Medicinal Products for Human Use.
George Underwood
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