In Mylan-Perrigo hostile takeover drama, it's proxy firm vs. proxy firm
- Mylan is offering $36 billion in its Perrigo. The goal: More consolidation in the generics space, according to Mylan CEO Heather Bresch.
- Last Friday, influential proxy adviser Institutional Shareholder Services recommended that Mylan shareholders vote "No" on the takeover, citing numerous hurdles that need to be overcome before the deal comes to fruition.
- Howver, a large Mylan shareholder, the hedgefund Paulson & Co., voted "Yes" on Friday in favor of Mylan's takeover of Perrigo. Paulson & Co. owns 4.6% of Mylan's stock. Other proxy firms have also voted to recommend completion of the deal.
Since April, when Mylan bid $29 billion for Perrigo, Perrigo has been decidedly unenthused about a merger and has clearly stated its intentions to fight back. Mylan currently has about a 1.5% stake in Perrigo.
Under Irish law, Mylan needs 80% of shareholder votes to pursue the takeover. But in a twist, Mylan has independently decided that all it needs is a simple majority (this was accomplished via a "technical move," according to the WSJ). So things could get even more complicated than they already are. The next step in this process is a shareholder vote on a stock issuance to fund the takeover which is scheduled for August 28.
While Mylan focuses mainly on generic drugs, as well as the branded Epi-Pen, Perrigo focuses on cold and allergy medicines, as well as infant formulas. If this merger were to somehow proceed, the combined company would indeed be a generics powerhouse.