It’s official: Mylan has taken its Perrigo buyout offer to the Irish company’s shareholders. But plenty of industry-watchers are still opposed to the idea.
The Dublin drugmaker has advised its investors to “take no action” regarding Mylan’s offer, which involves Perrigo shareholders netting $75 in cash and 2.3 Mylan share for each Perrigo share. The company’s board will assess the offer and make an official recommendation within the next 10 days, it said.
Perrigo has been opposed to the tie-up from the outset, and recently, one of its high-profile shareholders–former company vice chairman Mori Arkin–spoke out against it, too.
“Usually, when a good company is acquired, it is for a significant premium. In our case, it’s negligible, if at all,” he told Reuters, predicting that Perrigo’s stock–which currently sits at around $180–would trade at near $190 come early next year.
And they’re not alone in their thinking. Valuation is “currently the key factor that will likely preclude Perrigo shareholders from tendering their shares,” Citi analysts wrote in a note to clients last week, and it’s the implied valuation of Mylan’s bid that is “likely to constitute the primary hurdle to Perrigo shareholder support for the transaction.”
BMO Capital Markets analyst David Maris chimed in Thursday, too, writing to investors that “we believe Perrigo is better off without Mylan” because of Mylan’s too-low offer, skepticism in its ability to squeeze out costs, and its lack of experience in the OTC business that’s Perrigo’s bread and butter.
Regardless, Mylan’s execs are still confident they can get the job done. “The strategic logic behind this combination is abundantly clear,” CEO Heather Bresch said in a statement on Monday, with chairman Robert Coury adding that the company believes “the majority of Perrigo shareholders will support this full and compelling offer.”
By Carly Helfand
Source: Fierce Pharma
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