Perrigo Eastern Avenue Office

Generic drugmaker Mylan has officially made its $27bn takeover bid directly to shareholders of the Irish over-the-counter (OTC) firm Perrigo after its board rejected the previous proposal in April.

Under the revised bid, Mylan is offering $75 in cash and 2.3 shares of Mylan for each Perrigo share held, valued at around $187 based on the closing price of Friday.

If the transaction is complete, Perrigo shareholders will own 40% of the combined company.

Perrigo has confirmed that Mylan made an unsolicited exchange offer to acquire all of the issued and to be issued ordinary shares of the company. It also advised its shareholders to take no action in relation to the offer, at this time pending the board’s review.

Mylan executive chairman Robert Coury said: "With the overwhelming support of Mylan shareholders, today we officially are taking our offer directly to the Perrigo shareholders.

"We are highly confident that the majority of Perrigo shareholders will support this full and compelling offer, particularly in the absence of any competing interest in this asset and the significant uncertainties, execution risk and lengthy timetable associated with Perrigo’s standalone strategy.

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"With just one transaction with Mylan, we are offering Perrigo shareholders immediate accretion to the value of their holdings, $75 in cash, and the ability to participate in the significant opportunities created by this combination, building on Mylan’s impressive track record of success and delivering growth and value for shareholders over the long-term.

"Further, the price we are offering Perrigo shareholders represents a generous multiple of approximately 19x[1] based on Mylan’s current share price, which is one of the highest multiples paid in our industry to date taking into account recent large transactions, and we believe this multiple fairly reflects the intrinsic value of Perrigo."

"With just one transaction with Mylan, we are offering Perrigo shareholders immediate accretion to the value of their holdings."

Perrigo shareholders would own around 40% of the combined company under the terms of the offer, which the company said is set to expire on 13 November.

The board of Perrigo will review Mylan’s offer and make a recommendation to its shareholders within ten business days regarding the exchange offer.

The offer and withdrawal rights would expire on 13 November, unless the offer is extended with the consent of the Irish Takeover Panel.

In April, Mylan made a bid for Perrigo, stating that the combination of these businesses would produce a company with critical mass in specialty brands, generics, OTC and nutritional products.

However, Perrigo’s board of directors have unanimously rejected the unsolicited takeover bid from Mylan, claiming that the offer substantially undervalues the company.

Image: Perrigo’s Eastern Avenue Office. Photo: courtesy of Tagarcia3/ Perrigo Company.