Perrigo Takes Waterland to Arbitration Over Omega Pharma Acquisition

Perrigo (PRGO)   said Thursday it will file an arbitration claim against Dutch private equity firm Waterland and Belgian entrepreneur Marc Coucke after taking a $1.67 billion third-quarter hit from its Omega Pharma acquisition.

The impairment, which takes its losses from the Belgian business to $2.32 billion since the beginning of the year, includes a goodwill writedown of $804 million and a further $866 million cut the value of its brands, Perrigo said.

Over-the-counter drugmaker Perrigo bought Omega Pharma in November 2014 for €3.6 billion ($3.9 billion), including debt of $1.1 billion, and issued $900 million of shares to pay for it, just a year after its $8.6 billion dollar swoop on Ireland's Elan in a high-profile tax inversion.

Perrigo also said it hired Morgan Stanley to conduct a strategic review of its Tysbri multiple sclerosis drug, which brought in $93 million of royalty revenue in the third quarter.

"After careful consideration, we believe now is the right time to review strategic alternatives for Tysabri in order to monetize the value of this attractive asset. Perrigo remains committed to its investment grade rating regardless of the outcome of this review," Perrigo CEO John Hendrickson said in a statement.

The rights to Tysabri, or natalizumab, were acquired through the acquisition of Elan.

Perrigo, formerly of Allegan, Mich., but now headquartered in Dublin, said third-quarter net sales were up 1% compared with the previous year at $1.36 billion. But it reported a net loss of $1.26 billion in the three months to Oct. 1, 2016 compared with a net profit of $113 million in the same quarter last year. Reported diluted loss per share was $8.76, compared with earnings per share of 77 cents last year. 

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