Generic drugmaker Mylan, which is trying to take over Dublin-headquartered over the counter drug specialists Perrigo Pharmaceuticals, said on Tuesday that it will go directly to shareholders in the group after management refused to countenance an agreed offer.
Mylan is offering $27 billion in cash and stock for Perrigo, which acquired what was left of Ireland’s Elan in an $8.6 billion deal in 2013.. The Dutch-headquartered business will pay $75 in cash and 2.3 Mylan shares for each Perrigo share, or about $187 per share.
Mylan announced it wanted to buy Perrigo in April, but the company has rebuffed its offer, saying that it is too low and that Perrigo will do better off alone.
The falling price of Mylan shares means the deal is now worth less to Perrigo shareholders than when it was first announced last April, despite a “sweetening” of the offer later that month.
That increased offer came as happened as Mylan found itself a target – in its case from Israeli generics group Teva. Teva offered $40 billion for the group but eventually walked away to acquire instead the generics assets of Allergan, formerly known as Actavis and also headquartered in Dublin.
Mylan has pushed forward – saying it will start to contact shareholders in the Dublin business next week – and could now take control of the company through the tender offer.
Mylan’s approach is allowed under Irish takeover rules, which apply to Perrigo because of its Irish domicile.
Relocated
Mylan relocated from the US to the Netherlands last year after completing its own “tax inversion” that allowed it to slash its corporate tax bill. Its Dutch domicile also gives it a more powerful set of tools to repel hostile takeovers.
Mylan’s shareholders voted in favour of moving forward with a hostile bid at a extraordinary general meeting last month.
The proposal gained the support of two-thirds of votes cast, representing more than half of all outstanding shares, the company said.
At the time. Mylan executive chairman Robert Coury said the company would move in "coming weeks". The company had until September 14th to initiate the process for acquiring Perrigo.
Following the Mylan EGM vote, Perrigo chief executive Joe Papsa said: “We are confident that the majority of Perrigo shareholders will not tender their shares to Mylan.”
Investors have been uncertain over the deal closing but the possibility increased late last month when Mylan shareholders voted to pursue the takeover. The company must get just over 50 per cent through the tender offer to take control of Perrigo’s board.
“We are confident that Perrigo shareholders see that our offer provides superior immediate value, as well as long-term, sustainable value creation,” Mylan chairman Robert Coury said in the statement.
Mylan shares rose 1.3 percent to $48.69 on Nasdaq shortly after midday. Perrigo advanced 1.2 percent to $180.95 on the New York Stock Exchange. – Bloomberg
