Mylan Makes Formal $32 Bln. Offer For Perrigo - Update

(RTTNews) - Dutch generic drug maker Mylan N.V. (MYL), on Friday launched a formal offer to buy Dublin-based Perrigo Co. Plc (PRGO) for about $32 billion.

Mylan's formal offer comprises $60 in cash and 2.2 Mylan shares per Perrigo share, an increase from its initial failed bid of $205 per share in cash and stock, or $28.9 billion on April 8.

Based on Mylan's closing price on Thursday, the formal offer is valued at $222 per share, a 10 percent premium over the yesterday's closing price of Perrigo stock.

If Perrigo accepts the offer, Mylan shareholders would own about 61.8 percent of Mylan's shares and former Perrigo shareholders would own about 38.2 percent of Mylan's shares on a fully diluted basis.

Mylan said it expects the combination to result in at least $800 million of annual pre-tax operational synergies by the end of year four following the consummation of the offer. Mylan also expects the deal to be immediately accretive to earnings per share on a fully-synergized basis.

On April 21, Perrigo rejected Mylan's initial offer in tandem with Teva's $40 billion unsolicited proposal to buy Mylan.

But Mylan Executive Chairman Robert Coury is unrelenting in the pursuit for Perrigo.

In a statement, Coury said, "While we are disappointed by the decision of the Perrigo Board to reject our proposal without entering into discussions thus far, we are still hopeful and confident that we can engage with their Board about our offer and how to best bring our organizations together."

Teva offer required Mylan to back away from a combination with Perrigo. Teva said its proposal would be a better deal for Mylan shareholders.

Mylan had said it would review Teva's offer, but warned that any deal would be difficult to pass muster with antitrust authorities.

Mylan is one of the largest generics and specialty drug companies, with about 1,400 different products. Last year, Mylan agreed to buy the non-U.S. operations of Abbott Laboratories for $5.3 billion as a strategy to shift its tax base to the Netherlands.

In a similar effort, Perrigo in 2013 had acquired Elan Corp. in order to be domiciled in Dublin.

The pharmaceuticals industry has seen a slew of mergers, with Actavis plc (ACT) in March completing the acquisition of Allergan Inc (AGN) in a cash and equity deal valued at about $70.5 billion.

Mylan is trading at $75.47, up $1.78 or 2.42%, on a volume of 6.9 million shares on the Nasdaq.

Perrigo is trading at $195.02, down $6.61 or 3.28%, on a volume of 4.2 million shares on the NYSE.