REUTERS - Perrigo, the U.S. drug maker traded on the Tel Aviv Stock Exchange, on Wednesday made a fresh case for rejecting a $34 billion offer from generic drugmaker Mylan, saying Mylan’s recent share price plunge reinforces Perrigo’s intention to remain independent.
CEO Joseph Papa, in his first comments on the unsolicited acquisition attempt since Israel’s Teva Pharmaceuticals dropped its pursuit of Mylan in favor of another deal, reiterated that the $205 per share offer substantially undervalues Perrigo.
On a call to discuss quarterly results, Papa said the Perrigo board’s rejection of Mylan was unanimous and had nothing to do with Teva walking away from its attempt to buy Mylan in favor of a $40.5 billion deal for Allergan’s generics business.
However, Papa said, “The market movement following Teva’s announcement last week only reinforced our conviction about the Mylan offer.”
Mylan’s shares fell 14.5% after the Teva announcement. At $54.48, they are nearly 30% off where they were trading in April around the time of Teva’s initial approach. Perrigo shares fell 3% in Tel Aviv yesterday to 700.10 shekels ($183.65).
Mylan shareholders are set to vote on whether to move ahead with the takeover attempt August 28.
“I make no prediction on how the Mylan shareholders will vote but I want to remind everyone, including the Mylan shareholders, that if they proceed with a tender offer for Perrigo this will not be the easy path that some are painting it to be,” Papa said. “The bar for success in a tender offer process is a very high 80% of all outstanding Perrigo shares.”
Mylan declined to address Papa’s comments, but said it has discretion to lower the acceptance condition of a tender offer from 80% to greater than 50% of Perrigo shares.
Papa said shareholders he has met with expressed confidence in the company’s stand-alone strategy.
The maker of over-the-counter consumer products, generic topical medicines and animal health treatments said it expects to launch more than $1 billion worth of new products over the next three years, and will use its significant cash flow for small, bolt-on acquisitions.
“If Mylan does win their shareholder vote and initiate a tender process, we’ll make a strategic decision with the board about what’s the right thing to do for the company,” Papa said.
“Based on the current offer, if we ever get to a tender process, I intend to vote no to the Mylan unsolicited offer for Perrigo.”