Mylan NV failed to attract a majority of Perrigo Co. shareholders by a Friday deadline for its $26 billion unsolicited offer to acquire the over-the-counter drugmaker.
Advertisement
While more shares could still be tendered, many large institutional investors would have tendered their shares at this stage if they were going to accept the offer, the people added.
Around 40 percent of Perrigo’s ordinary shares had been tendered with 10 hours left – significantly short of Mylan’s acceptance threshold of 50 percent, reports said, quoting sources close to the matter.
Perrigo, calling the offer grossly inadequate, is urging its shareholders to reject the takeover. Mylan has also drawn accusations of insider dealing earlier in the year.
A loss for Mylan will hurt hedge funds that bought big blocks of Perrigo stock in recent months, hoping for a deal. Allegan, Michigan-based Perrigo combined with Ireland’s Elan Corp. and now lists its headquarters as Dublin. Political scrutiny of drug pricing and broader selloff in biotechnology stocks have made the sector one of the worst-performing of late.
Perrigo, meanwhile, joins a small club of companies that have successfully beaten back a tender offer on persuasion alone, without traditional corporate defenses.
The Wall Street Journal, citing anonymous sources, reported that bid had not garnered enough interest from shareholders by Thursday night. In a bid to satisfy investors, the company has unveiled a share buyback and cost cuts, and now must deliver on those promises.
The deal’s rejection will now focus investors’ attention on Perrigo’s standalone strategy. Even with Friday’s defeat, Perrigo is likely still a target, owing in large part to its Irish domicile, which makes it an attractive tax base for a larger USA rival.
Advertisement
“Once we get beyond this Mylan situation, we’ll look at other opportunities as far as M&A is concerned”, Papa told reporters in Tel Aviv last month.
