Perrigo rebuffs sweetened $35.6bn offer from Mylan

Mylan, one of the world's biggest generic drug groups, increased its offer to buy Perrigo to $35.6bn, its latest effort to tempt its smaller rival into a combination as it tries to fend off a hostile approach from Israel's Teva.

In the latest twist in a hard-fought three-way takeover battle, Mylan offered to pay $75 in cash and 2.3 of its own shares, up from $60 in cash and 2.2 in shares, valuing Perrigo at around $242.23 a share based on current prices.

Perrigo, the cough remedies maker, immediately rejected the new offer arguing that the new offer continues to undervalue the company.

The value of Mylan's bid is hotly disputed, because the value of its own shares is being inflated by takeover interest from Teva. Its stock price would likely fall if the Israeli group's approach were to fail, leading to a corresponding decline in its offer for Perrigo.

Netherlands-incorporated Mylan said that the value of its new offer was $232.23 per Perrigo share, based on its closing stock price on April 8, the day after the market reacted to its initial proposal.

However, that valuation is contested by Perrigo's board, which considers Mylan's offer to be to $202.20, based on Mylan's stock price on March 30, when it was rumoured that Teva would make a bid for it.

Robert Coury, Mylan's executive chairman, said: "With this enhanced offer, I look forward to . . . finalising the implementation of this truly compelling combination, which is a win-win for both Mylan and Perrigo shareholders and all other stakeholders."

The drugmaker initially made an approach of $205, which was an unspecified mix of cash and stock. The offer was promptly rejected by Perrigo.

Mylan's latest offer comes two days after the company rejected an unsolicited $40bn bid from Israeli pharmaceutical company Teva.

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Most industry analysts think Teva's bid for Mylan will prevail.

Ronny Gal, an analyst at Bernstein, said Mylan's latest offer was "probably not enough for" Perrigo's shareholders and "probably too rich" for its own investors. "We still think Teva-Mylan is the more likely scenario, unless Perrigo decides to engage," said Mr Gal.

Jason Gerberry, an analyst at Leerink, said he had spoken to Teva's investor relations team on Wednesday and "came away convinced Teva is committed to getting the Mylan deal done and has room to sweeten its offer".

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