Thursday said its Board of Directors has reviewed Mylan NV’s ( MYL ) unsolicited tender offer to acquire all outstanding shares of the company, and, in consultation with its financial and legal advisors, unanimously determined that the offer substantially undervalues Perrigo and does not adequately compensate shareholders for Perrigo’s exceptional growth prospects.
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Mylan first proposed to buy Perrigo in April and launched a tender offer on Monday after its bid was repeatedly rebuffed by Perrigo.
Papa and CFO Judy Brown repeated the assertion that Mylan’s offer seriously undervalues Perrigo and its growth prospects and poses “untenable” risk to the company’s shareholders.
Mylan is offering $75 in cash and 2.3 shares of Mylan for each Perrigo share held, valuing Perrigo at about $27.41 billion based on Wednesday’s closing stock price.
For its part, Mylan isn’t likely to back down anytime soon, and will probably continue to make its case to investors ahead of the November 13 deadline for the offer.
In a letter to shareholders today, Perrigo President, CEO and Chairman Joseph Papa repeats that claim and provides several reasons why the offer should be rejected.
He says Perrigo has an “outstanding track record” and a “bright future”. Specifically, the firm noted that it would be expecting massive sales revenue (more than $29 billion, according to the company) from so-called “switches”, wherein prescription products are transformed into OTC products, and said it would also be pursuing pipeline growth via its own acquisitions.
In a written statement, Mylan’s executive chairman Robert J. Coury argued the offer was a good one for Perrigo shareholders and would give them “significant opportunities created by this combination”.
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Brown called Mylan’s estimates of generating $800 million in operating synergies by acquiring Perrigo as “overly optimistic” and would take at least three years to accomplish.
