POTTERS BAR, England,
April 27, 2015 /PRNewswire/ -- Mylan
N.V. (NASDAQ: MYL) today announced that its Board of Directors has
unanimously rejected the unsolicited expression of interest from
Teva Pharmaceutical Industries, Ltd. (NYSE and TASE: TEVA) to
acquire Mylan, which was announced by Teva on April 21, 2015.
After a comprehensive review conducted in consultation with its
financial and legal advisors, the Mylan Board concluded the
approach did not meet any of the key criteria that would cause the
Mylan Board to depart from the Company's successful and
longstanding standalone strategy, and consider engaging in
discussions to sell the Company.
Mylan Executive Chairman Robert J.
Coury commented, "Our Board has a very important fiduciary
obligation to protect the best interests of the Company's
shareholders and other stakeholders, and has always been open to
considering all paths forward in that regard, and this situation is
no different. However, that does not mean we will entertain offers
that grossly undervalue the company, and leave our shareholders and
other stakeholders exposed to serious risk.
"After thorough consideration, Mylan's Board unanimously
determined that Teva's proposal grossly undervalues Mylan, and
would require Mylan's shareholders to accept what we believe are
low-quality Teva shares in exchange for their high-quality Mylan
shares in a transaction that lacks industrial logic and carries
significant global antitrust risk. In addition, we also
believe that the proposal does not address the serious challenges
of integrating two fundamentally different and conflicting cultures
under a Teva Board and leadership team with a poor record of
delivering sustainable shareholder value. We believe that these
challenges would make it very difficult to generate value from this
combination for Mylan shareholders.
"Furthermore, the proposal contains nothing meaningful
indicating why a combination with Teva would be in the best
interest of Mylan's employees, patients, customers, communities and
other stakeholders. In summary, the Board determined that
Teva's expression of interest is not in the best interests of
Mylan, its shareholders or other stakeholders, and we believe that
this is only a mere attempt by Teva to frustrate and distract Mylan
from its business plan and strategy."
The following is the text of the letter that was sent on
April 27, 2015, to Teva's President
and Chief Executive Officer, Erez
Vigodman.
April 27, 2015
Erez Vigodman
Chief Executive Officer
Teva Pharmaceutical Industries, Ltd.
5 Basel St.
P.O. Box 3190 Petach Tikva
Israel 49131
Dear Erez:
First, let me say what a pleasure it was to meet you for the
first time in New York last
Friday. As we discussed, I was very disappointed by your decision
to make your interest in Mylan public without first taking the time
to speak to me or meet in person. As those who know me will attest,
I always am willing to discuss opportunities to create value for
Mylan's shareholders and other stakeholders, and although it was
after-the-fact, I was happy to grant you the opportunity to meet
with me in person to hear your rationale outlined in your letter
dated April 21, 2015.
During our meeting, we touched on Teva's many struggles
throughout the last several years, including the approval of the
first generic version of your flagship product Copaxone® (despite
Teva's claims that an AB-rated generic would never be approved);
the persistent turnover and turmoil amongst the Teva leadership and
Board and the resulting strategic confusion; Teva's consistent
underperformance in comparison to the market and our industry; and
your increasing need to find new sources of future growth. As I am
sure you are aware, Mylan's historical compound annual growth rates
(CAGR) in terms of revenues and adjusted EBITDA from 2011-2014 are
more than double Teva's.1
Erez, you told me in our meeting that Teva is different now and
the challenges and cultural issues you have faced previously were
now in the past. You assured me that Teva's new Board and
management team had brought a new approach to the way it does
business. Yet, this change was not evident in the way you
approached your interest in Mylan. Through your leadership, you had
the opportunity to set the right tone, and show the world that
there is a new Teva. Instead, you chose to approach Mylan in a way
that demonstrates that the old Teva is very much still alive, which
only continues to beg questions about Teva's credibility.
In contrast, our engagement with Perrigo has been based on a
long history of mutual respect and prior private discussions. My
initial letter to Joe Papa was made
public after we were advised to do so by outside counsel pursuant
to legal requirements, and I personally informed Joe in advance of
making the proposal public.
For the sake of your current and future shareholders, employees,
patients, customers, communities and other stakeholders, I do hope
you find a way to eventually change Teva's culture and establish
credibility in your business dealings. However, we do not wish to
make Teva's problems Mylan's problems, or to inflict them on
Mylan's shareholders and other stakeholders. This potential
combination is clearly in no one's best interest.
At the conclusion of our meeting, however, I committed to you
that I would take to the Mylan Board your indication of interest
and your Board's beliefs as expressed in your letter to me, and I
stated that the Mylan Board would respond accordingly. Please find
below that promised response.
The Board of Directors of Mylan received and carefully
reviewed your expression of interest and beliefs with the
assistance of our financial advisor, Goldman, Sachs & Co., our
legal counsel, Cravath, Swaine & Moore LLP, and our Dutch legal
counsel, NautaDutilh N.V.
Following thorough consideration, the
Mylan Board unanimously rejected Teva's expression
of interest after determining it does
not satisfy any of the key criteria necessary to
permit our Board to depart from our successful
and longstanding standalone strategy, or be distracted from
our pursuit of other value-creating initiatives,
to consider engaging in discussions to
sell Mylan.
The Mylan Board of Directors has a very important fiduciary
obligation under Dutch law to act in the best interests
of the Company's shareholders, employees, patients, customers,
communities and other stakeholders. The Board always has
been open to considering any and all paths forward in
that regard, and has recognized that under certain
circumstances it is possible that pursuing a proposal
contemplating the sale of Mylan could be in the best interests
of Mylan's shareholders and other stakeholders. The
Teva expression of interest, however, is not even close
to qualifying as a proposal worth pursuing.
The Mylan Board believes that
transparency regarding its position is in the best
interests of the Company and its important constituencies. For that
reason, even though Mylan is not for sale, the Board has asked me
to lay out the conditions that would need to be satisfied by a
potential acquirer before Mylan's Board would be willing
to consider any disruptions to our Company and its focused
execution on our standalone strategy and enter into
any discussions about the possibility of selling the
Company.
In reviewing these criteria, it should be clear to you and
to your Board why Teva's expression of interest and its
beliefs fall far short of convincing us to engage in any further
discussions at this time. You should not view
this explanation as a negotiating position or a
counter-offer; it is neither. It is simply an
explanation of the minimum criteria a proposal would
need to satisfy before our Board would consider it worth pursuing.
To be frank, given Teva's history and actions to date, it is
implausible that Teva can realistically satisfy
our minimum criteria as set forth below.
1.Valuation
Mylan has created tremendous value for its shareholders over the
long term. Our standalone story and opportunity are clear,
and have been laid out consistently for our shareholders and other
stakeholders.
As you and your advisors are well aware, many transactions have
taken place in our space, including several with lesser quality
players and much more robust valuations than what you expressed. I
believe that the grossly insufficient valuation you have presented
can only be attributed to a lack of real commitment to pursuing
this transaction.
As we have communicated many times to the public, our
shareholders and other stakeholders, our Board and management are
not, and will never be, entrenched; however, that does not mean we
will entertain offers that grossly undervalue our Company. Our
Board will certainly not consider engaging in discussions
to sell the Company unless the starting point of the discussions
is significantly in excess of $100 per share. This valuation is
consistent with a best-in-class asset such as Mylan and with one
that has a strong foothold in India, which provides a highly competitive
cost structure and a strong backbone for growth. Similar
acquisitions in recent history in the specialty and generics
industry that were transformational and included best-in-class
assets with significant growth prospects have had an average LTM
EBITDA multiple of approximately 20x. 2 Generic
manufacturers with a large Indian component have had an even higher
average multiple at approximately 25x.3 In stark
contrast, your expression of interest values Mylan at approximately
16.6x EBITDA4.
2.Currency of Acquisition Consideration, Industrial Logic and
Cultural Fit
Acquisitions of public companies can come in the form of stock,
cash or a mix of stock and cash. The willingness of the Mylan
Board to entertain the inclusion of shares of a
potential acquirer as the currency for an
acquisition depends on the quality of the
potential acquirer and its stock.
If a potential acquirer is a strong company
with a tried and tested leadership, strong growth
prospects, a robust strategy for sustainable, long-term
growth, complementary assets and a proven history of
successful execution, then the Mylan Board would be open to the
inclusion of stock as acquisition consideration. But, based on our
evaluation, that is not the case here.
Simply put, the Mylan Board has no interest in
considering an expression of interest that, based on our
evaluation of the factors below, requires Mylan shareholders to
accept what we believe is low-quality and high-risk currency
in the form of Teva shares in exchange for their
higher-quality and lower-risk Mylan shares in a transaction
that lacks sound industrial logic and is likely to
be significantly value and growth destructive.
As you well know, Teva faces the looming loss of
significant revenue from the end of exclusivity
for the Copaxone® franchise, and has
seen years of consistent and significant underperformance,
even while enjoying the benefits of Copaxone®. Further, Teva has
faced a constantly changing and flip flopping strategy,
rotating leadership, shareholder outrage and a flat to negative
growth outlook.
Acquiring a great company like Mylan would not fix a
struggling Teva because of the lack of sound industrial logic for
such a combination. It is clear that your proposed acquisition is
in the pursuit of size, not strategy, and does not
address the significant structural and other challenges to Teva's
recovery. There is simply no ultimate benefit in the three
core areas that we believe are essential to any
transaction in our industry: geographic reach, portfolio
diversification and capability expansion.
Our geographic positions are largely the same and combining them
would add significant complexity without adding meaningful exposure
to new markets.
Our portfolios carry substantial redundancy
with thousands of overlapping products globally.
Importantly, this overlap includes key pipeline products
expected to drive growth in the near and long-term, including
generic Advair®, generic Copaxone®, generic EpiPen®
Auto-Injector and several biosimilar products.
Further, Mylan and Teva bring each other little in terms of
new capabilities. It is important to note that given the
massive overlap between our companies, the synergizing of
redundant or similar efforts and products will inherently have
a major negative impact on the very growth prospects you are aiming
to extract from Mylan. What will be left is a short-term financial
pop and longer-term value erosion.
Combining our two organizations to achieve growth requires more
than just sorting through size and complexity. We believe that
significant cultural differences would make the successful
integration of the two companies nearly impossible. At Mylan, we
have consistently set a clear strategic plan
and we reward our employees for accomplishing our
objectives. This is something we feel strongly has
contributed to our consistent outperformance. On the other
hand, Teva's underperformance has been directly attributed to
its "dysfunctional" culture. In fact, one of your most vocal
shareholders who has studied your company in-depth and knows your
management team and Board very well stated
explicitly to Reuters with respect
to integrating culture that "Mylan would give
Teva severe indigestion."5
This is only further exacerbated when examined globally.
Mylan operates a complex and substantial business in
India where more than
12,0006 of our employees reside, 21
manufacturing facilities are located,7 and a major
R&D hub for our global business is
positioned.8 Teva has a limited
presence and experience in the country, and in fact has
been disparaging about India's
products and culture. In a Business Standard article
entitled "Teva Execs Remark Creates Furor in Indian Pharma," a
senior Teva officer was reported saying, "you would never sit on a
plane if you thought that the parts were coming from a dodgy
factory somewhere that you didn't know. So, why do we accept this
for medicines?"9 Bringing Teva's "dysfunctional"
culture to the region could disrupt the core of our business,
result in the flight of key talent (in India and
elsewhere), and meaningfully and adversely impact the
results of the possible combination.
This challenged culture at Teva is, we believe, a
direct result of a Board of Directors that refuses to change, lacks
adequate global pharmaceutical experience and consistently
meddles in company operations. This is the same Board that
was described as "like a nuthouse" by an investor in a
Bloomberg article10.
Since 2007, your Board has churned through three
different Chief Executive Officers, running the only one with the
global pharmaceutical experience, which we think is critical to the
position, out of town within 18 months of being on the job.
Any investor should be gravely concerned that an experienced
lead executive could be dismissed over "slight differences" of
opinion with the Board. We believe that these rapid changes
in a short period of time have left the company with a complete
lack of long-term strategic focus. While I recognize that
you are fairly new to your position, I cannot ignore the fact that
you were present on Teva's Board during some of the company's most
turbulent and "dysfunctional" times.
Ten years of acquisitions and a flip-flopping strategy have
left Teva with a smattering of assets in specialty, generics,
biotech and consumer. You claim to want to "redefine the
generics industry," but what faith can we have that you have any
clear vision for the industry at all? And how can investors
be assured this "redefinition" will not be abandoned for yet
another new strategy?
Customers and partners already have voiced their concerns about
Teva, given its culture and reputation, and indicated their lack of
support for the possible combination.
We also have serious concerns about Teva's ability to
integrate and efficiently run a combined company, and deliver
meaningful shareholder value. There is simply no track record for
investors to find. A review of the facts offers a clear view
why we believe Teva stock is unacceptable.
- In the past three years Teva has underperformed peers
and the S&P 500 index by 223% and 12%11,
respectively.
- Teva's growth prospects as outlined by analysts calls for a
CAGR of revenue from 2015-2017 of (0.6)%12 and a CAGR of
EBITDA in the same time period of
2.1%12.
- The median analyst price target for Teva represents a
1.0%13 premium to its current stock price.
Analysts have lowered EPS estimates for Teva by
approximately 10% over the last two
years12.
- In the past three years, Teva's stock price has appreciated
42%, while Mylan's stock price has appreciated
247%11.
Mylan, on the other hand, has delivered very strong
performance:
- Mylan has grown revenue at a CAGR of 9%14 in the
past six years, adjusted EBITDA by 15%14 and adjusted
diluted EPS by 28%14 over the same time period.
- Our three-year annualized total shareholder return of
36.2%15 more than doubles the S&P 500 and beats the
S&P 500 Pharmaceuticals average. Our one- and five-year
total shareholder return numbers also beat both metrics.
These numbers speak for themselves. With
the pending loss of exclusivity for
the Copaxone® franchise (also impacting the 40
mg), they will likely only get
worse.16 Wall Street estimates show that
this loss could result in more than $600
million in annual EBITDA impact.
The bottom line is that it would not be
sensible for the Mylan Board to consider an expression of
interest for a business combination that would result in
Mylan shareholders being forced to take stock of a poorly
performing troubled company in a combination that lacks
industrial logic and is a terrible cultural fit.
3.Regulatory Risk
Mylan's Board would not be willing to consider a
sale of the Company unless a
potential acquirer agrees at the outset to bear the
entire regulatory risk. The possibility of agreeing
to sell the Company and then having the regulators block the
transaction (see Time Warner Cable, whose transaction with Comcast
was terminated just last week in light of significant regulatory
concerns) is an unacceptable risk for our Company,
shareholders, employees, patients, customers, our communities and
other stakeholders, particularly given the strength of
our platform and the positive trajectory of our
Company.
For this reason, before our Board would seriously
consider a proposal to sell Mylan, the potential acquirer
would need to agree to guarantee to the Board's satisfaction that
the transaction would receive regulatory
approval, regardless of what actions the
potential acquirer will need to take in order to
make that happen. No exceptions would be acceptable.
Furthermore, the potential acquirer would need to
commit that the deal would close and our shareholders would receive
their consideration within a relatively short period.
As a point of reference, our proposal
to Perrigo contemplates "hell or high water"
requirements, as well as a commitment to close
within seven months. We do not believe that Teva could
offer similar comfort.
We continue to believe that our massive overlapping
positions would create significant antitrust concerns, creating the
need for meaningful value-destructive divestitures.
Furthermore, we believe regulators will, and should, care not
just about overlapping products but the significant concentration
of manufacturing power and supply to the market, as well as pricing
power and potential for drug shortages. Already a respected
medical professional has commented that the combination is
problematic.17 Despite your need to move
quickly to attempt to salvage shareholder value at Teva,
sorting through an issue as critically important as the price and
supply of generic medicines will not be easy or fast.
There are significant risks that regulators would block a
combination of Mylan and Teva, and even if regulators were willing
to approve the transaction, they would require significant
divestitures. Despite this, Teva has not made a
commitment to guarantee that it would obtain regulatory
approval in connection with its expression of interest,
and it has not indicated an acceptable deadline—or any deadline—by
which it would do so.
4.Other Stakeholders
The Mylan Board of Directors takes its fiduciary duties owed to
all stakeholders under Dutch law very seriously. In fact one of the
main reasons why Mylan chose to organize itself in the Netherlands is its remarkable similarity
to Mylan's former domicile in Pennsylvania, which also has a long history of
respecting the value of all stakeholders in addition to
shareholders.
Mylan has been extremely successful at creating shareholder
value while at the same time maximizing the best interests
of employees, customers, patients, our communities and our
other stakeholders and pursuing the Company's mission to provide a
broad range of affordable, high-quality medicine to the world
population. Teva's expression of interest contains
nothing indicating why a combination with Teva would be in the best
interests of Mylan's employees, patients, customers, communities or
other stakeholders. In fact, we believe that statements in
the press attributed to Teva's team have indicated that Teva
does not believe the interests of these
stakeholders are important. We also were
interested to read in your communications to your employees
that your operations in Israel
would be unaffected by a combination, reflecting your long history
of refusing to take costs out of Israel at the expense of far more efficient
operations and employment elsewhere.
Mylan's Board would not engage in any proposal that the
Board did not believe was in the best interests of its
stakeholders. Teva's expression of interest,
which contemplates significant synergies without
saying where they will come from and
involves a potential acquirer that has been
widely viewed as dysfunctional and poorly run and that has
consistently flip-flopped on strategy, is not in the best
interests of any of our stakeholders or of Mylan's mission.
Based on all of the foregoing, Mylan's Board unanimously
decided to reject Teva's proposal. The
proposal grossly undervalues Mylan, and it would
require Mylan's shareholders to accept what we believe are
low-quality Teva shares in exchange for their high-quality Mylan
shares in a transaction that lacks industrial logic and carries
significant global antitrust risk. Furthermore, it calls for
two fundamentally different and conflicting cultures
to be integrated under a Board and leadership team with
absolutely no proven ability to
deliver sustainable shareholder value. Simply put,
Teva's expression of interest is not in the best interests of
Mylan's shareholders, employees, patients, customers, communities
and other stakeholders.
As this letter demonstrates, we have a keen appreciation
for the challenges you face. The Mylan Board wishes you the
best in attempting to turn Teva around.
Sincerely,
Robert J. Coury
Executive Chairman
ABOUT MYLAN
Mylan is a global pharmaceutical company
committed to setting new standards in healthcare. Working together
around the world to provide 7 billion people access to high quality
medicine, we innovate to satisfy unmet needs; make reliability and
service excellence a habit; do what's right, not what's easy; and
impact the future through passionate global leadership. We offer a
growing portfolio of around 1,400 generic pharmaceuticals and
several brand medications. In addition, we offer a wide range of
antiretroviral therapies, upon which approximately 40% of HIV/AIDS
patients in developing countries depend. We also operate one of the
largest active pharmaceutical ingredient manufacturers and
currently market products in about 145 countries and territories.
Our workforce of approximately 30,000 people is dedicated to
creating better health for a better world, one person at a time.
Learn more at mylan.com.
RESPONSIBILITY STATEMENT
The directors of Mylan accept
responsibility for the information contained in this announcement,
save that the only responsibility accepted by the directors of
Mylan in respect of the information in this announcement relating
to Perrigo, the Perrigo Group, the Perrigo Board, Teva, the Teva
Group, the Teva Board and, in each case, the persons connected with
them, which has been compiled from published sources, has been to
ensure that such information has been correctly and fairly
reproduced or presented (and no steps have been taken by the
directors of Mylan to verify this information). To the best of the
knowledge and belief of the directors (who have taken all
reasonable care to ensure that such is the case) the information
contained in this announcement is in accordance with the facts and
does not omit anything likely to affect the import of such
information.
DEALING DISCLOSURE REQUIREMENTS
Under the provisions
of Rule 8.3 of the Irish Takeover Panel Act, 1997, Takeover Rules
2013 (the "Irish Takeover Rules"), if any person is, or becomes,
'interested' (directly or indirectly) in, 1% or more of any class
of 'relevant securities' of Perrigo or Mylan, all 'dealings' in any
'relevant securities' of Perrigo or Mylan (including by means of an
option in respect of, or a derivative referenced to, any such
'relevant securities') must be publicly disclosed by not later than
3:30 pm (New York time) on the 'business' day following
the date of the relevant transaction. This requirement will
continue until the date on which the 'offer period' ends. If two or
more persons co-operate on the basis of any agreement, either
express or tacit, either oral or written, to acquire an 'interest'
in 'relevant securities' of Perrigo or Mylan, they will be deemed
to be a single person for the purpose of Rule 8.3 of the Irish
Takeover Rules.
Under the provisions of Rule 8.1 of the Irish Takeover Rules,
all 'dealings' in 'relevant securities' of Perrigo by Mylan or
'relevant securities' of Mylan by Perrigo, or by any party acting
in concert with either of them, must also be disclosed by no later
than 12 noon (New York time) on
the 'business' day following the date of the relevant
transaction.
A disclosure table, giving details of the companies in whose
'relevant securities' 'dealings' should be disclosed, can be found
on the Irish Takeover Panel's website at
www.irishtakeoverpanel.ie.
Interests in securities arise, in summary, when a person has
long economic exposure, whether conditional or absolute, to changes
in the price of securities. In particular, a person will be treated
as having an 'interest' by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative
referenced to, securities.
Terms in quotation marks are defined in the Irish Takeover
Rules, which can also be found on the Irish Takeover Panel's
website. If you are in any doubt as to whether or not you are
required to disclose a dealing under Rule 8, please consult the
Irish Takeover Panel's website at www.irishtakeoverpanel.ie or
contact the Irish Takeover Panel on telephone number +353 1 678
9020 or fax number +353 1 678 9289.
Goldman Sachs, which is authorized by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority in the United Kingdom, is acting for Mylan and no one
else in connection with Mylan's proposed acquisition of Perrigo
(the "proposed transaction") and will not be responsible to
anyone other than Mylan for providing the protections afforded to
clients of Goldman Sachs, or for giving advice in connection with
the proposed transaction or any matter referred to herein.
Goldman Sachs does not accept any responsibility whatsoever for
the contents of this communication or for any statement made or
purported to be made by them or on their behalf in connection with
the offer. Goldman Sachs accordingly disclaims all and any
liability whether arising in tort, contract or otherwise which it
might otherwise have in respect of this communication or any such
statement.
ADDITIONAL INFORMATION
In connection with Mylan's
offer to acquire Perrigo (the "offer"), Mylan expects to
file certain materials with the Securities and Exchange Commission
(the "SEC"), including, among other materials, a
Registration Statement on Form S-4 and a proxy statement on
Schedule 14A (in preliminary and then definitive form). This
communication is not intended to be, and is not, a substitute for
such filings or for any other document that Mylan may file with the
SEC in connection with the offer. INVESTORS AND SECURITYHOLDERS OF
MYLAN AND PERRIGO ARE URGED TO READ THE DOCUMENTS FILED WITH THE
SEC CAREFULLY AND IN THEIR ENTIRETY (IF AND WHEN THEY BECOME
AVAILABLE) BEFORE MAKING AN INVESTMENT DECISION BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT MYLAN, PERRIGO AND THE OFFER.
Such documents will be available free of charge through the website
maintained by the SEC at www.sec.gov or by directing a request to
Mylan at 724-514-1813 or investor.relations@mylan.com. Any
materials filed by Mylan with the SEC that are required to be
mailed to shareholders of Perrigo and/or Mylan will also be mailed
to such shareholders. This communication has been prepared in
accordance with U.S. securities law, Irish law and the Irish
Takeover Rules.
A copy of this communication will be available free of charge at
the following website: perrigotransaction.mylan.com. Such website
is neither endorsed, nor sponsored, nor affiliated with Perrigo or
any of its affiliates. PERRIGO® is a registered trademark of L.
Perrigo Company. ADVAIR® is a registered trademark of Glaxo
Group Limited Corporation. COPAXONE® is a registered
trademark of Teva Pharmaceutical Industries LTD. EPIPEN®
AUTO-INJECTOR is a registered trademark of Mylan Inc.
PARTICIPANTS IN SOLICITATION
This communication is
not a solicitation of a proxy from any investor or shareholder.
However, Mylan and certain of its directors, executive officers and
other members of its management and employees may be deemed to be
participants in the solicitation of proxies in connection with the
offer under the rules of the SEC. Information regarding Mylan's
directors and executive officers may be found in the Mylan proxy
statement/prospectus on Form S-4 filed with the SEC on December 23, 2014 and Mylan Inc.'s Annual Report
on Form 10-K for the fiscal year ended December 31, 2014, which was filed with the SEC
on March 2, 2015. These documents can
be obtained free of charge from the sources indicated above.
Additional information regarding the interests of these
participants, which may, in some cases, be different than those of
Mylan's shareholders generally, will also be included in the
materials that Mylan intends to file with the SEC when they become
available.
NON-SOLICITATION
This communication is not intended
to, and does not, constitute or form part of (1) any offer or
invitation to purchase or otherwise acquire, subscribe for, tender,
exchange, sell or otherwise dispose of any securities, (2) the
solicitation of an offer or invitation to purchase or otherwise
acquire, subscribe for, sell or otherwise dispose of any securities
or (3) the solicitation of any vote or approval in any jurisdiction
pursuant to this communication or otherwise, nor will there be any
acquisition or disposition of the securities referred to in this
communication in any jurisdiction in contravention of applicable
law or regulation. No offer of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended.
FURTHER INFORMATION
The distribution of this
communication in certain jurisdictions may be restricted or
affected by the laws of such jurisdictions. Accordingly, copies of
this communication are not being, and must not be, mailed or
otherwise forwarded, distributed or sent in, into, or from any such
jurisdiction. Therefore, persons who receive this communication
(including, without limitation, nominees, trustees and custodians)
and are subject to the laws of any such jurisdiction will need to
inform themselves about, and observe, any applicable restrictions
or requirements. Any failure to do so may constitute a violation of
the securities laws of any such jurisdiction. To the fullest extent
permitted by applicable law, Mylan disclaims any responsibility or
liability for the violations of any such restrictions by any
person.
FORWARD-LOOKING STATEMENTS
This communication contains
"forward-looking statements." These statements are made pursuant to
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements may include,
without limitation, statements about the proposed transaction,
benefits and synergies of the proposed transaction, future
opportunities for Mylan, Perrigo, or the combined company and
products and any other statements regarding Mylan's, Perrigo's, or
the combined company's future operations, anticipated business
levels, future earnings, planned activities, anticipated growth,
market opportunities, strategies, competition and other
expectations and targets for future periods. These may often be
identified by the use of words such as "will", "may", "could",
"should", "would", "project", "believe", "anticipate", "expect",
"plan", "estimate", "forecast", "potential", "intend", "continue",
"target" and variations of these words or comparable words. Because
forward-looking statements inherently involve risks and
uncertainties, actual future results may differ materially from
those expressed or implied by such forward-looking statements.
Factors that could cause or contribute to such differences include,
but are not limited to: uncertainties as to the timing of the
proposed transaction; uncertainties as to whether Perrigo will
cooperate with Mylan and whether Mylan will be able to consummate
the proposed transaction; uncertainties as to whether shareholders
will provide the requisite approvals for the proposed transaction;
the possibility that competing offers will be made; the possibility
that certain conditions to the consummation of the proposed
transaction will not be satisfied; the possibility that Mylan will
be unable to obtain regulatory approvals for the proposed
transaction or be required, as a condition to obtaining regulatory
approvals, to accept conditions that could reduce the anticipated
benefits of the proposed transaction; the ability to meet
expectations regarding the accounting and tax treatments of the
proposed transaction, changes in relevant tax and other laws,
including but not limited to changes in healthcare and
pharmaceutical laws and regulations in the U.S. and abroad; the
integration of Perrigo being more difficult, time-consuming or
costly than expected; operating costs, customer loss and business
disruption (including, without limitation, difficulties in
maintaining relationships with employees, customers, clients or
suppliers) being greater than expected following the proposed
transaction; the retention of certain key employees of Perrigo
being difficult; the possibility that Mylan may be unable to
achieve expected synergies and operating efficiencies in connection
with the proposed transaction within the expected time-frames or at
all and to successfully integrate Perrigo; expected or targeted
future financial and operating performance and results; the
capacity to bring new products to market, including but not limited
to where Mylan uses its business judgment and decides to
manufacture, market and/or sell products, directly or through third
parties, notwithstanding the fact that allegations of patent
infringement(s) have not been finally resolved by the courts (i.e.,
an "at-risk launch"); success of clinical trials and Mylan's
ability to execute on new product opportunities; the scope, timing
and outcome of any ongoing legal proceedings and the impact of any
such proceedings on financial condition, results of operations
and/or cash flows; the ability to protect intellectual property and
preserve intellectual property rights; the effect of any changes in
customer and supplier relationships and customer purchasing
patterns; the ability to attract and retain key personnel; changes
in third-party relationships; the impact of competition; changes in
the economic and financial conditions of the businesses of Mylan,
Perrigo, or the combined company; the inherent challenges, risks,
and costs in identifying, acquiring and integrating complementary
or strategic acquisitions of other companies, products or assets
and in achieving anticipated synergies; uncertainties and matters
beyond the control of management; and inherent uncertainties
involved in the estimates and judgments used in the preparation of
financial statements, and the providing of estimates of financial
measures, in accordance with GAAP and related standards or on an
adjusted basis. For more detailed information on the risks and
uncertainties associated with Mylan's business activities, see the
risks described in Mylan Inc.'s Annual Report on Form 10-K for the
year ended December 31, 2014 and our
other filings with the SEC. You can access Mylan's filings with the
SEC through the SEC website at www.sec.gov, and Mylan strongly
encourages you to do so. Mylan undertakes no obligation to update
any statements herein for revisions or changes after the date of
this release, except as required by law.
NO PROFIT FORECAST / ASSET VALUATIONS
No statement in
this communication is intended to constitute a profit forecast for
any period, nor should any statements be interpreted to mean that
earnings or earnings per share will necessarily be greater or
lesser than those for the relevant preceding financial periods for
Mylan or Perrigo as appropriate. No statement in this communication
constitutes an asset valuation.
SOURCES AND BASES OF INFORMATION
Sources and bases of
information contained in the letter reproduced in this announcement
can be found in the footnotes to that letter.
1 Calculated based on Mylan and Teva SEC filings.
2 Average LTM EBITDA multiple based on the following
transactions: Pfizer's announced acquisition of Hospira
(5-Feb-2015), Actavis' announced acquisition of Allergan
(17-Nov-2014), Actavis' announced acquisition of Forest
Laboratories (18-Feb-2014), Teva's announced acquisition of Barr
Pharmaceuticals (18-Jul-2008), Fresenius' announced acquisition of
APP (7-Jul-2008), Mylan's announced acquisition of Merck KGaA
(12-May-2007) and Novator Partners' announced acquisition of
Actavis (10-May-20107).
3 Average LTM EBITDA multiple based on the following
transactions: Sun Pharma's announced acquisition of Ranbaxy
(6-Apr-2014), Mylan's announced acquisition of Strides Arcolab's
Agila Specialties Injectables Unit (27-Feb-2013), Abbott
Laboratories' announced acquisition of Piramal's Domestic
Formulation Business (21-May-2010) and Daiichi Sankyo's announced
acquisition of Ranbaxy (11-Jun-2008).
4 Based on Mylan 2015 IBES forecast.
5 Reuters, "Teva shares slide on generic Copaxone
fears" – 19-April-2015
6 Internal Mylan figure
7 Mylan factsheet on Mylan.com
8 Mylan factsheet on Mylan.com
9 Remarks made by Teva
Europe's President and CEO, Gerald
Van Odijk, while participating in the annual meeting of the
European Association of Pharmaceutical Full-line Wholesalers (GIRP)
in Cannes in 2010 and as reported
in the media:
http://www.business-standard.com/article/companies/teva-exec-s-remark-creates-furore-in-indian-pharma-110062200080_1.html
10 Bloomberg, "Teva Returns to Roots After Outside
CEO Faces 'Nuthouse'" – 5-March-2014
11 Stock price appreciation based on performance from
24-Apr-2012 to 24-Apr-2015. Selected
Peers includes: Actavis, Akorn, Endo, Jazz, Mallinckrodt, Perrigo and Valeant.
12 Analyst estimates based on I/B/E/S median
estimates as of April 24, 2015.
13 Median analyst price target per Bloomberg as of
3-Apr-2015.
14 Represents compound annual growth rate from 2008
to 2014 per Company SEC filings.
15 Annualized total shareholder return based on
month-end share price from 30-Mar-2012 to 31-Mar-2015.
16 Goldman Sachs research report on Teva, "What to
expect from 2015 guidance; increasing our estimates" –
2-Dec-2014.
17 Reuters, "DEALTALK-Drug overlaps, shortages may
complicate Teva bid for Mylan" – 24-April-2015
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/mylan-board-unanimously-rejects-unsolicited-expression-of-interest-from-teva-300072371.html
SOURCE Mylan N.V.