Generic Drug Maker Mylan Makes Official Offer for Perrigo

Israeli drug maker Teva, meanwhile, said Friday it is committed to acquiring Mylan, which in turn has expressed skepticism about Teva's plan.

Bloomberg

Generic drug maker Mylan over the weekend made official its offer for over-the-counter medicines maker Perrigo as it remained at the center of a three-way battle in which Mylan wants to buy Perrigo, while Teva Pharmaceuticals wants to buy Mylan.

Perrigo and its CEO Joseph Papa have already rejected Mylan’s offer and reiterated Friday it feels the bid, worth more than $30 billion, is too low.

Israeli drug maker Teva, meanwhile, said Friday it is committed to acquiring Mylan, which in turn has expressed skepticism about Teva’s plan. Teva is offering $40.1 billion for Mylan.

Shares of Mylan have soared amid speculation about a possible sale to Teva. That included a 3.2% gain on Friday to $76.06.

By buying Perrigo, a U.S. company with shares traded on the Tel Aviv Stock Exchange, Mylan hopes to create a company with more than $15 billion in annual sales of generic drugs, over-the-counter medicines, nutritional products, infant formula and vitamins.

Teva, already the world’s biggest generic drug company, wants to become even more dominant by buying Mylan and says the companies could save money by combining. A combined Teva and Mylan would also have the leverage to try to raise prices on some generic drugs.

The two companies have about $30 billion in combined annual sales, although Teva has promised to sell off some businesses to meet antitrust requirements.

Mylan said last week that it doesn’t believe the Teva deal offers a good fit and that regulators probably wouldn’t approve it, but the company said it would review Teva’s offer.

Mylan shares have climbed 38% since rumors about a sale to Teva began swirling on March 10. Most of the gains came after Mylan disclosed its offer for Perrigo. Teva’s bid for Mylan is worth $82 per share in cash and stock.

Mylan said Perrigo shareholders would get $60 in cash and 2.2 shares of Mylan stock for every Perrigo share they own. Mylan says its offer is worth $205 per share, which values Perrigo at $30.14 billion. Mylan says it could achieve $800 million in pretax savings four years after completing an acquisition of Perrigo.

But Perrigo said the offer is worth less than that because speculation about Teva’s offer drove up the price of Mylan stock.

Shares of Perrigo Co. fell 2.1% to 751.50 shekels in Tel Aviv Stock Exchange trading Sunday while Teva fell 1.6% to end at 253 shekels.