Perrigo CEO says no easy path for Mylan to acquire company

Wed Aug 5, 2015 1:44pm EDT
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By Bill Berkrot

(Reuters) - Perrigo Co Plc (PRGO.N: Quote) on Wednesday made a fresh case for rejecting a $34 billion offer from generic drugmaker Mylan NV (MYL.O: Quote) and said Mylan's recent share price plunge reinforces Perrigo's intention to remain independent.

Perrigo Chief Executive Joseph Papa, in his first comments on the unsolicited acquisition attempt since Israel's Teva Pharmaceutical Industries (TEVA.TA: Quote) 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 (AGN.N: Quote) 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 percent after the Teva announcement. At $54.48, they are nearly 30 percent off where they were trading in April around the time of Teva's initial approach. Perrigo shares were down 32 cents at $190.32.

Mylan shareholders are set to vote on whether to move ahead with the takeover attempt Aug. 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 percent 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 percent to greater than 50 percent of Perrigo shares.   Continued...

A customer shops in the pharmacy department of a Target store in the Brooklyn borough of New York June 15, 2015.  REUTERS/Brendan McDermid