Teva forges ahead with Mylan pursuit
pharmafile | May 6, 2015 | News story | Sales and Marketing | Mylan, Perrigo, Teva, generics
Teva has reinforced its commitment to buy Mylan despite previous rejection and only days after Mylan upped its own bid for Irish OTC firm Perrigo.
The three generics companies have been involved in an M&A chain since last month, when US-based Mylan made an unsolicited $29 billion bid for Perrigo. While that was still ongoing, Teva swooped in with a $40 billion offer for Mylan that could create the world’s largest generics company.
However, Perrigo has repeatedly rejected increasing offers from Mylan, and the US firm itself has been rebuffing Teva.
In response Teva has now released an investor presentation and a statement laying out the benefits and terms of its proposal. Erez Vigodman, president and chief executive of Teva, says: “Our strong financial and operating performance demonstrates that great people, great products and world-class execution of our strategy are coming together in a powerful way at Teva.
“Together with Mylan, we would have the infrastructure and the capabilities to more quickly pursue a differentiated business model that meets the evolving needs of patients and customers and support the highest levels of quality and clinical excellence.
“We are committed to making this transaction a reality and delivering the value that our stockholders and the other stakeholders of both companies deserve.”
The presentation also says that the firm is ‘ready and willing’ to meet with Mylan immediately, that its proposal is ‘extremely attractive’ for the stakeholders of both companies, and that “the combined company will have a strong and flexible financial profile”.
Notably, the Israeli company also says that its proposal “is contingent on Mylan not completing its proposed acquisition of Perrigo or any alternative transactions”. Mylan had previously accused Teva of using the bid to “frustrate and distract us from our business plan and strategy”, while its Perrigo acquisition is in turn seen as an attempt to ward off Teva.
The process has begun to turn sour with strong words being used on both sides.
After rejecting Teva’s initial offer, Mylan’s executive chairman Robert Coury said in an open letter 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”.
Teva countered with its own open letter from Vigodman, who said: “It is hard to reconcile the pre-emptive rejection [of our bid], your announcement of a firm offer for Perrigo before your board of directors even responded to our proposal, and the tone of your letter to me with the proper exercise of fiduciary responsibilities under any legal or business framework.”
Its latest statement seems designed to directly address several of the criticisms raised by Coury. In it the company highlights “the strength of our business, pipeline, leadership and long-term growth prospects” and “the significant achievements and robust financial performance we have generated through our transformation”, adding that the combination “makes compelling strategic, financial and cultural sense”.
George Underwood
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