Irish drug maker Perrigo knocks back €27bn bid
Dublin-based Perrigo has rejected a $29bn (€27bn) bid from generic drugmaker Mylan saying it substantially undervalued the company.
The Irish firm said that the offer of $205 per share was too low and did not take Perrigo's €2.48bn acquisition of Omega Pharma and new products that are expected to generate about $1bn in revenue into account.
Mylan, which is headquartered in Pennsylvania, makes about 1,400 medications. Its offer for Perrigo represented a 25pc premium over the company's share price on April 3, the last trading day before the bid was launched.
When it bought Elan, it shifted its headquarters to Ireland to cut its effective tax rate.
A statement from Perrigo said that the deal "would deny Perrigo shareholders the full benefits of Perrigo's durable competitive position and compelling growth strategy, which is reflected in the company's three-year organic net sales compound annual growth rate goal for calendar 2014 to 2017 of 5-10pc."
Perrigo is best known in this country for its 2013 deal to buy Elan for almost €6.7bn, one of a slew of major deals in the sector that saw big US makers reap big tax savings by shifting their headquarters out of the US as a result of reverse mergers with a foreign takeover target.
The firm's chairman, President and CEO Joseph Papa added: "Perrigo's board believes that the company has a strong independent future and is well positioned to continue to drive superior growth and shareholder value and provide high quality affordable healthcare products to customers and consumers globally."
The firm also "strongly" advised shareholders to not take any action in the wake of the offer.
Perrigo, which has a large and attractive portfolio of over-the-counter consumer products, infant formulas and a line of generic topical pharmaceutical medicines, had long been seen as a takeover target.
Its rejection of Mylan now leaves the US company in an awkward position.
Yesterday Teva Pharmaceutical Industries, the world's largest generic company, made a $40bn hostile bid for Mylan.
Mylan, which makes the EpiPen product for severe allergies, now must decide whether to raise its offer for Perrigo, engage in talks with Teva, or take another route. The company has previously said that it is not interested in being acquired by Teva.
Mylan did not respond to a request for comment.