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Perrigo CEO calls Mylan offer ‘grossly inadequate’; Israeli shareholder rejects the bid

(L_R) Teva CEO EREZ VIGODMAN and PERRIGO CEO Joseph Papa

 

Trying to fend off a hostile takeover attempt by Mylan’s $27 billion bid, Perrigo Chairman, President and CEO Joseph Papa sent a letter to Mylan Executive Chairman Robert Coury to ‘clarifying numerous misleading statements made by Mylan and reiterating Perrigo’s confidence that Perrigo shareholders will not tender into Mylan’s value-destructive offer, ‘ as said.

“We are confident in our ability to deliver value well in excess of your offer through our standalone plan and our acquisition strategy, ” Perrigo CEO Joseph Papa wrote.

“The $205-per-share value that Mylan initially proposed, and your current lower offer, are grossly inadequate.”

Mylan’s offer, which was rejected by Perrigo’s board in April, “is neither compelling, nor accretive.” he add.

Mr. Papa cited “troubling corporate governance values at Mylan” and Mylan’s decision to lower the threshold for the number of Perrigo shares it needs to consummate the deal to anything over 50 percent (down from 80 percent) as other reasons the merger did not make sense.

“You pretend you could generate the same synergies whether you own 100 percent of Perrigo or whether you own only a control stake, ” Mr. Papa stated. “This defies economic theory and practice.”

Mr. Papa’s letter is expected to be one of many volleys between the two drug giants in coming weeks as Mylan tries to convince Perrigo shareholders to agree to the multi-billion-dollar takeover.

Mylan said it will launch a tender offer for Perrigo shares Monday. Shareholders will have until Nov. 13 to accept the offer.

But Israeli shareholder Mori Arkin already rejects Mylan Perrigo bid. Arkin sold his drug company Agis Industries to Perrigo 10 years ago for $850 million in cash and shares. The former vice chairman of Perrigo holds a 0.5% stake in the company.

Arkin told Reuters that he will vote against Mylan’s at next week’s shareholders meeting. “Usually, when a good company is acquired, it is for a significant premium. In our case, it’s negligible, if at all. If we wait a few months, we would have the same price without all the hassle and risk involved in a Mylan deal.”

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