Dive Brief:
- Generic drug maker Perrigo's board has once again unanimously rejected Mylan's takeover bid for the company. The board is also urging shareholders not to tender their offers to Mylan in support of its bid.
- Mylan officially took its $27.1 billion hostile takeover offer to Perrigo's shareholders, bypassing the company's board, on Monday. Perrigo's board promised a response to the acquisition attempt within 10 days. As it turns out, it only took them two.
- In a letter to shareholders, Perrigo offered a laundry list of reasons that investors should not buy into Mylan's proposal and tender their shares. The company's shareholders have until November 13 to make a decision on the bid, after which the offer expires.
Dive Insight:
Perrigo is, once again, calling Mylan's bid a significant undervaluation of the company. And it's not taking any chances on the hostile bid, listing out multiple reasons why the board believes shareholders shouldn't get on the Mylan bandwagon.
The company emphasized the hefty returns shareholders have enjoyed since 2007 in a letter, and argued that Perrigo offers plenty of standalone value. Specifically, the firm noted that it would be expecting massive sales revenue (more than $29 billion, according to the company) from so-called "switches," wherein prescription products are transformed into OTC products, and said it would also be pursuing pipeline growth via its own acquisitions.
Perrigo CEO John Papa also didn't mince words about exactly what he thought of Mylan and the likelihood that the company would add value to shareholders.
"Mylan’s pursuit of Perrigo “at all costs” highlights a number of extraordinarily troubling corporate governance values, which would further erode Perrigo’s premium valuation in the marketplace and should give investors pause before placing their trust in the Mylan Board and management team," wrote Papa in the shareholder letter.
"Mylan has a track record of operating against the best interests of shareholders. It has already gone so far as to threaten to delist Perrigo shares if it gains control of Perrigo, despite having no stated business purpose and without even the pretense of deliberations by a future Perrigo board to consider Perrigo’s best interests. We believe this threat is a scare tactic, and shows how little regard Mylan has for being a steward for shareholder interests."
For its part, Mylan isn't likely to back down anytime soon, and will probably continue to make its case to investors ahead of the November 13 deadline for the offer.