Generics drugmaker Mylan NV (MYL.O), which is in the middle of a three-way takeover battle, has said it is unwilling to sell itself to Israeli rival Teva Pharmaceuticals Industries Ltd (TEVA.TA), but would consider buying that company down the road, Mylan Executive Chairman Robert Coury told investors this week.
The company has been steadfast in its refusal to combine with Teva and is instead encouraging shareholders to support its own $34 billion unsolicited offer for over-the-counter drugmaker Perrigo Co Plc (PRGO.N).
Teva made an unsolicited $40 billion bid for Mylan last month, and it was rejected. Teva said on Tuesday it will move ahead with its plans to acquire Mylan if the Perrigo deal is not completed.
Mylan’s Coury said in a statement in April the company has studied a possible combination with Teva for some time. Mylan concluded a deal would be “without sound industrial logic or cultural fit” and would attract antitrust scrutiny.
Mylan said in April it would not engage with Teva until the company was willing to offer more than $100 per share.
Speaking privately to investors this week, however, Coury was more willing to consider a deal with Teva after the Perrigo transaction is completed, as long as Mylan is the buyer, sources told Reuters.
Mylan Chief Executive Officer Heather Bresch explained to Reuters in an interview the logic behind Coury’s comments. Mylan has a better management team and integrated global supply chain, as well as a superior track record with acquisitions. That would make it more capable than Teva to lead the potential combined company, she said.
A deal could make sense following a Mylan-Perrigo combination and more time for Teva’s management to “clean up” the company.
“We were just saying in a hypothetical situation, if it ever were to happen after all these other things, the only way it could happen is with us,” Bresch said. She added antitrust concerns would still exist.
The investor sources declined to be named because they are not authorized to speak with the media.
A Teva spokesman said the company remains deeply committed to a deal with Mylan and that there is strong strategic and cultural fit in combining the two companies.
Mylan management is meeting privately with top investors this week in New York and Boston to drum up support for its bid for Perrigo. Perrigo last week rejected Mylan’s latest offer worth $75 and 2.3 Mylan shares per Perigo share, up from a previous $60 in cash and 2.2 shares.
Mylan, which makes the EpiPen product for severe allergies, is incorporated in the Netherlands and can take advantage of Dutch provisions that would make a hostile takeover difficult.
Pressure has been growing on Jerusalem-based Teva for new revenue sources. Its biggest selling drug, multiple sclerosis injectable treatment Copaxone, faces competition from oral treatments and cheaper generics in the coming years.
(Reporting by Olivia Oran and Caroline Humer in New York; Editing by Ted Botha and Andre Grenon)