Mylan (MYL) Stock Soars, Loses $26 Billion Hostile Bid for Perrigo

Mylan (MYL) stock is spiking in pre-market trading on Friday, after its hostile bid for Perrigo (PRG) failed as only 40% of Perrigo shareholders backed of the deal.
By Rachel Graf ,

NEW YORK (TheStreet) -- Mylan (MYL) - Get Report stock is up by 11.11% to $48 in pre-market trading on Friday, after losing its $26 billion hostile bid for rival Perrigo (PRGO) as only 40% of Perrigo shareholders backed the deal, the Wall Street Journal reports.

Perrigo stock is plummeting by 10.61% to $140 in pre-market trading.

The pharmaceutical company needed at least 50% of Perrigo stock to be tendered into the offer for the deal to be successful.

The offer expired at 8 a.m. ET today.

Mylan had been attempting the takeover since April, and took its offer directly to Perrigo shareholders in early September.

Last month, Mylan shareholders voted in favor of the acquisition, and both European Union regulators and the Federal Trade Commission approved the deal.

"As we have said all along, Mylan viewed Perrigo as a unique and exciting opportunity, but not one that was required for the future success of our company," Mylan Executive Chairman Robert Coury said in a statement.

Separately, TheStreet Ratings team rates MYLAN NV as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

We rate MYLAN NV (MYL) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, attractive valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 7.1%. Since the same quarter one year prior, revenues rose by 29.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 121.19% to $974.80 million when compared to the same quarter last year. In addition, MYLAN NV has also vastly surpassed the industry average cash flow growth rate of -17.22%.
  • The gross profit margin for MYLAN NV is rather high; currently it is at 59.48%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, MYL's net profit margin of 15.90% significantly trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.65, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.98 is somewhat weak and could be cause for future problems.
  • You can view the full analysis from the report here: MYL

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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