Mylan urged to forgo $29 billion unsolicited bid for Perrigo

JERUSALEM — Teva Pharmaceutical Industries Ltd. has made a bid to acquire Mylan N.V. in a cash-and-stock deal valued at about $40 billion.

In announcing its offer Tuesday, Teva said its proposal is a more attractive option for shareholders of Mylan, which nearly two weeks ago made an unsolicited bid to buy Perrigo Co. plc in a deal valued at about $29 billion.

Erez Vigodman, president and chief executive officer of Teva

Under its proposal, Teva would acquire Mylan’s outstanding shares at $82 per share, with the consideration comprised of about 50% cash and 50% stock. Teva said its bid represents a 37.7% premium to Mylan’s stock price on April 7, the last day of trading before Mylan announced its proposal to buy Perrigo, and a 48.3% premium to Mylan’s stock price on March 10, the last day of trading before broad speculation of a transaction between Teva and Mylan.

“I am writing to share our belief that a combination of Teva and Mylan has compelling strategic and financial benefits for both companies and would create substantial value for our respective stockholders,” Teva president and chief executive officer Erez Vigodman wrote in a letter Tuesday to Mylan executive chairman Robert Coury. “The proposed combination of Teva and Mylan would create an industry-leading company, well-positioned to transform the global generics space. The company would have a unique and differentiated business model and the ability to leverage its significant assets and capabilities in generics and specialty. 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.”

As of late morning Tuesday, Mylan had not issued a comment on Teva’s proposal. Mylan has its corporate headquarters in Potters Bar, England, and its U.S. office in Canonsburg, Pa.

On Friday, Mylan released a statement from Coury in response to mounting media speculation that Teva was preparing to make a bid for the company.

“Mylan is fully committed to its stand-alone strategy, including its proposal to acquire Perrigo, and today’s speculation has no impact whatsoever on this strategy,” Coury said in the April 17 statement. “We have studied the potential combination of Mylan and Teva for some time, and we believe it is clear that such a combination is without sound industrial logic or cultural fit. Further, there would be significant overlap in the companies’ businesses and we believe that it is unlikely that any such combination could obtain antitrust regulatory clearances.

“Of course, should any party make an actual offer to acquire Mylan,” Coury added, “the board would carefully consider it in exercising its fiduciary duties in the best interests of the company, our stockholders and other stakeholders.”

On April 13, Mylan reported that it filed premerger notification with the U.S. Federal Trade Commission and Department of Justice regarding its proposed acquisition of Dublin, Ireland-based Perrigo, as required under the Hart-Scott-Rodino Antitrust Improvements Act.

Teva said Tuesday that 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 also benefit from advanced R&D capabilities in the generics industry and the world’s leading integrated API division, according to Teva. The company added that Teva and Mylan product offerings are “highly complementary” and together would create the broadest portfolio in the industry, with a combined pipeline of over 400 pending ANDAs and over 80 first-to-files in the United States.

In addition, Teva noted that the combined company’s enhanced financial profile would open up opportunities for future growth in generics, specialty drugs and “the intersection of the two,” with the merged company benefiting from leading positions in multiple sclerosis, respiratory, pain, migraine, movement disorders and allergy therapeutics.

“The combination of Teva and Mylan is a truly unique opportunity to build upon both companies’ solid foundations,” Vigodman stated. “Bringing the two together will create a much stronger, more efficient platform to achieve our goals. As one company, we would have the infrastructure and capabilities to faster pursue a differentiated business model, fully integrating specialty and generics drugs with products, devices, services and technologies to meet the evolving needs of patients and customers.”

Teva said its board has unanimously approved the proposal to acquire Mylan and that the transaction would not be subject to a financing condition or require a Teva stockholder vote. Teva noted that its proposal is contingent on Mylan not completing its proposed acquisition of Perrigo or any alternative transactions.

Teva said it expects that the proposed transaction could be completed by year-end 2015.