Perrigo last month rejected Mylan’s offer of $75 in cash and 2.3 Mylan shares for each Perrigo share, which had a value of about $32.7 billion.
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“We’re pretty far apart, ” Perrigo CEO Joseph Papa said Monday at an investor meeting hosted by UBS AG in New York, where he gave a presentation and spoke to investors during a smaller session. “We believe they have substantially undervalued the company.”
UBS published a summary of Papa’s speech in which he said that Mylan “substantially undervalued the company.” In addition, he said that Mylan’s rate of growth and profit multiple would lead to a dilution for Perrigo’s shareholders. Papa added that the ROIC (return on investment capital) from the deal was not attractive and that if Perrigo decided to consider Mylan’s offer, he would also discuss the matter with other potential buyers to achieve the best returns for shareholders.
UBS said that in the long term Perrigo could achieve organic growth of 5-10% while continuing to seek non-organic growth opportunities.
Mylan has said it plans to go directly to Perrigo’s shareholders with an offer. That could happen by Sept. 14, Papa said at the conference. Perrigo doesn’t plan to use a poison pill to try to block such an offer.