Mylan tells Teva to ‘stop playing games’
Teva has bid $40bn for Mylan
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Mylan, a leading generics drugmaker, on Monday demanded that its rival Teva “stop playing games” and either turn its $40bn approach into a formal bid or walk away.
Robert Coury, Mylan chairman, in a tersely worded letter attacked Israel’s Teva for interfering with his board’s effort to acquire Perrigo, a smaller rival.
Mr Coury also said that Teva’s “expression of interest” in April to acquire Mylan lacked clarity, adding that subsequent statements about a potential deal were “inaccurate and misleading”. Mylan shareholders will vote at an extraordinary general meeting later this year to either endorse or reject Mylan’s $35.6bn proposed bid for Perrigo. It has already been rejected by the Irish-based company. “Teva’s actions can only be considered to be a thinly veiled attempt to frustrate our board’s clearly articulated, consistent and successful strategic direction, including the vote at the EGM on our pending acquisition of Perrigo,” said Mr Coury. “It is time for Teva and its board to stop playing games with our company.” Teva in May disclosed a 1.35 per cent stake in Mylan through more than 13,000 transactions, buying shares at prices generally between $69 and $71 apiece, according to a filing. In April Teva had offered to pay Mylan shareholders $82 per share in an evenly split cash and stock offer, a 48.3 per cent premium to Mylan’s unaffected stock price on March 10. Mylan quickly rejected Teva’s move. A takeover by Teva would torpedo any Mylan deal with Perrigo, which makes cough medicines and allergy remedies. A Teva-Mylan combination would create a generic drugs group with a market capitalisation of about $100bn and annual revenues of roughly $30bn.
“. . . we believe that it is unlikely that any such combination could obtain antitrust regulatory clearances”
A deal of this size would likely come under intense scrutiny from competition watchdogs, which is one of the main reasons Mylan’s board is opposed to the company being acquired by the Israelis. “A combination is without sound industrial logic or cultural fit,” Mr Coury said in April after Teva’s approach. “There would be significant overlap in the companies’ businesses and we believe that it is unlikely that any such combination could obtain antitrust regulatory clearances.” Erez Vigodman, Teva’s chief executive, has played down fears that any deal might be blocked by regulators. He remained committed to reaching an agreement despite the rejection of Mylan’s board.
Mylan shares closed at $73.32 on Monday and were down half a per cent in after-hours trading following the release of the letter to Teva.
Teva said the share purchases underscored the company’s commitment to consummate a transaction with Mylan. President Netanyahu said that he would lobby his US regulators in favor of the Teva deal. Lobbyists in Washington DC, applauded President Netanyahu’s statement on Wednesday.