Perrigo Shareholders Give Thumbs Down to $34 Billion Mylan Offer
Mylan NV (MYL) - Get Report walked away from its hostile $34 billion offer for Perrigo (PRGO) - Get Report , after fewer than 50% of the target's shares were tendered into the offer by a Friday deadline.
Hertfordshire, England-based Mylan said that only about 40% of Dublin-based Perrigo shares were tendered into its offer, well below the company's 50% goal. Under the rules of the Irish Takeover Panel, Mylan must let its offer lapse and walk away for a year, since it failed to reach the 50% tendered share threshold.
Mylan in April offered $75 in cash and 2.3 Mylan shares for Perrigo, in an offer that valued Perrigo at about $175 per share. Shares of Perrigo opened Friday down 8% on the Nasdaq, trading at about $145 apiece.
Meanwhile, Mylan traded up about 12%, or $5.25, in part due to merger arbitrators unwinding their deal positions.
Perrigo in October announced a series of initiatives that it argued would add more value than Mylan's offer, including a $2 billion stock buyback plan and a restructuring that would eliminate 800 jobs. The company is also seeking buyers for its U.S. vitamin business. Company chairman and CEO Joseph C. Papa, in a statement, said he believes Perrigo has a bright future as an independent company.
"Strong organic growth, a disciplined approach to M&A, and transparent, accessible corporate governance policies are the foundation of our successful business strategy," Papa said. "Now that the Mylan tender offer is behind us, we look forward to continuing to create significant value for our shareholders."
Mylan, which earlier this year fought off a hostile $40 billion offer from Teva Pharmaceutical Industries (TEVA) - Get Report , has been seeking new revenue streams to offset drugs that are soon to come off of patent. But the Perrigo offer was controversial among Mylan shareholders as well, as advisory firm Institutional Shareholder Services had concluded that the purchase of Perrigo would not be profitable for at least three years after completion.
Mylan Executive Chairman Robert J. Coury, in a statement Friday, said that although Mylan thought Perrigo was a good fit, the deal was "not one that was required for the future success of our company." He said that Mylan has a strong balance sheet and will seek out other options.
"We are well-positioned to quickly execute on the next strategic, value-enhancing opportunities for our business, some of which we have already identified," Coury said. "These potential external opportunities, coupled with the numerous exciting organic growth drivers we have cultivated and the powerful and differentiated global platform we have built, ensure we will remain a leader in our industry and that we are well-positioned to deliver continued growth in the near- and long-term."