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Generic Love Triangle

The media have been speculating on a potential bid from Teva for Mylan for some time, and although Mylan dismissed the idea earlier in April as being “without sound industrial logic or cultural fit” (1), Teva has decided to make its move anyway; on April 21, the company made an offer of $82 per Mylan share in a 50 percent cash/50 percent stock proposal, which values Mylan at around $40 billion.

Mylan has harshly rejected the offer, claiming that it undervalues the company and adding that there is a significant overlap in the companies’ businesses and that the deal is unlikely to obtain anti-trust regulatory clearances anyway.

In addition, Mylan is busy pursuing its desired acquisition. At the start of April, Mylan made a proposal of $205 per share to acquire Perrigo, an Irish manufacturer of generic medicines and other health-related products. In a letter to Perrigo’s president, CEO and chairman, Joseph Papa, Mylan’s Robert Coury said, “As you and I have discussed on a number of occasions over the past few years, a combination of Mylan and Perrigo offers clear and compelling strategic and financial benefits, has sound industrial logic, and would create a global leader with a unique and one-of-a-kind profile.” He also offered Papa the opportunity to serve as co-chairman and member of the Mylan Board. But the same day that Teva made a bid for Mylan, Perrigo’s board of directors unanimously rejected Mylan’s proposal, claiming that it undervalued the company (2). Mylan has now taken its offer directly to Perrigo’s shareholders.

Meanwhile, Teva seems confident it is the better suitor for Mylan (3). “We firmly believe that a combination of Teva and Mylan is a much more attractive and value-creating alternative for Mylan and its stockholders than Mylan’s proposed acquisition of Perrigo,” said a Teva statement. Although the company added that it was a little sore to have been rejected before its offer was officially made. “We were disappointed that you prematurely addressed a potential combination in your press release issued on April 17, 2015.”

Which deal will be done? Only time will tell, but Mylan has already prepared its defenses against hostile takeovers with a Dutch “poison pill” plan. Perhaps, as in so many love triangles, it will all end in tears.

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  1. Mylan “Mylan Proposes To Acquire Perrigo For $205 Per Share” (April, 2015).
  2. Perrigo, “Perrigo Board Unanimously Rejects Unsolicited Proposal From Mylan” (April, 2015).
  3. Teva, “Teva Proposes to Acquire Mylan for $82.00 Per Share in Cash and Stock” (April, 2015).
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