Big pharma, M&A

Teva bids to acquire Mylan as Perrigo rejects approach

Posted on 22 April 2015

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Teva Pharmaceutical announced a proposal to acquire all of the outstanding shares of Mylan in a transaction valued at $40 billion, with the consideration to be comprised of approximately 50 percent cash and 50 percent stock.

The Teva cash and stock proposal provides Mylan stockholders with a substantial premium and immediate cash value, as well as significant potential for future value creation through participation in a financially and commercially stronger company.

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Teva’s proposal also provides Mylan stockholders with a more attractive alternative to Mylan’s proposed acquisition of Perrigo Company, as announced on April 8, 2015, as well as to Mylan on a standalone basis.

Teva’s proposal would provide Mylan stockholders with consideration representing a 37.7% premium to the stock price of Mylan on April 7, 2015, which is the last day of trading prior to Mylan’s press release regarding its unsolicited proposal for Perrigo, and a 48.3% premium to the unaffected stock price of Mylan on March 10, 2015, which is the last day of trading prior to widespread speculation of a transaction between Teva and Mylan.

The proposed combination of Teva and Mylan would create a leading company in the pharmaceutical industry, well positioned to transform the global generics space.

The combined company would leverage its significantly more efficient and advanced infrastructure, with enhanced scale, production network, end-to-end product portfolio, commercialization capabilities and geographic reach.

With this platform, the combined company would focus on complex technologies and more durable and sustainable products, in combination with robust capabilities in specialty drug development and commercialization.

As a result, the combined company would have a unique and differentiated business model addressing significant trends and discontinuities prevailing today among patients and healthcare systems around the world.

The combined company would also have an enhanced financial profile, creating the opportunity for rapid deleveraging and the funding of future growth – in generics, specialty and the intersection of the two.

Meanwhile.....

Perrigo announced that its Board of Directors has unanimously rejected the unsolicited Proposalfrom Mylan, disclosed April 8, 2015, to acquire all of the outstanding shares of Perrigo for $205.00 per share.

Following a thorough review, advised by its financial and legal advisors, the Board unanimously concluded that the Proposal substantially undervalues the Company and its future growth prospects and is not in the best interests of Perrigo's shareholders.

Key factors informing the Board's determination include:

The Proposal substantially undervalues Perrigo's differentiated global business, including the Company's leading market position in key franchises, global distribution platform, and proven expertise in product development and supply chain management;

The Proposal would deny Perrigo shareholders the full benefits of Perrigo's durable competitive position and compelling growth strategy, which is reflected in the Company's three-year organic net sales compound annual growth rate (CAGR) goal for calendar 2014 to 2017 of 5-10%;

The Proposal does not take into account the full benefits of the Omega Pharma acquisition, which closed on March 30, 2015, including additional value to be derived from synergies and increased global presence; and

The Proposal does not take into account Perrigo's innovative new product pipeline, which is expected to generate nearly $1 billion in net sales over the next three years, excluding sizable upside from potential new indications for Tysabri.

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