Mylan Loses Hostile Bid for Perrigo--Update
November 13 2015 - 09:34AM
Dow Jones News
By Liz Hoffman And Chelsey Dulaney
Mylan NV lost its $26 billion hostile bid for Perrigo Co. after
a seven-month pursuit, a rare outcome in what shaped up to be one
of the most bitter takeover battles in decades.
Mylan said Friday that about 40% of Perrigo's shares were
tendered in the offer. It needed at least 50% to take control of
its smaller rival. The Wall Street Journal had reported Thursday
night that Mylan was set to lose the bid.
The cash-and-stock offer expired Friday morning at 8 a.m., but
most institutional investors had to tender by Thursday night to be
counted by the national stock clearinghouse known as DTC, the
Journal reported.
Shares of Mylan rose 9% to $47.10 a share in premarket trading,
while Perrigo shares fell 9.6% to $141.50 a share.
A representative for Perrigo wasn't immediately available for
comment.
Mylan has been trying since April to acquire Perrigo, a maker of
store-brand versions of cold and allergy medicines. The
fight--which briefly involved an unsolicited bid for Mylan by Teva
Pharmaceutical Industries Ltd.--came during a year of fevered, at
times contentious, deal-making between health-care companies.
There have been $532 billion of health-care takeovers announced
in 2015, according to Dealogic, up more than 60% compared with the
same period a year earlier.
Mylan's loss will hurt hedge funds that bought big blocks of
Perrigo stock in recent months, hoping for a deal. Among the
largest Perrigo holders are John Paulson's firm Paulson & Co.,
which had a roughly $500 million stake, as well as Elliott
Management Corp. and Highfields Capital Management LP, which each
had more than $300 million invested in the Ireland-based drug maker
as of Wednesday, filings show.
Hedge funds with big pharmaceutical holdings have been battered
recently, as scrutiny of drug pricing and a broader selloff in
biotechnology stocks has made the sector one of the
worst-performing of late.
Mylan Chief Executive Robert J. Coury said the company "viewed
Perrigo as a unique and exciting opportunity, but not one that was
required for the future success of our company."
Perrigo, meanwhile, joins a small club of companies that have
successfully beaten back a tender offer on persuasion alone,
without traditional corporate defenses. Irish takeover rules give
boards of target companies few tools to shield themselves or find a
"white knight" buyer, leaving Perrigo at the mercy of
shareholders.
Perrigo last month unveiled cost cuts and a share buyback meant
to satisfy investors. And the company briefly considered a large
deal, including a takeover of Endo International PLC, The Wall
Street Journal earlier reported. But as the bid entered its final
weeks, Perrigo's board backed a stand-alone strategy that would put
the company's fate in the hands of its investors-and in the ability
of its chief executive, Joe Papa, to win them over.
Having done so, Perrigo must now confront its independent
future. The company is still a target, owing in large part to its
Irish domicile, which makes it an attractive tax base for a larger
U.S. rival. And it must deliver on the cost cuts it promised
investors last month.
Write to Liz Hoffman at liz.hoffman@wsj.com and Chelsey Dulaney
at Chelsey.Dulaney@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 13, 2015 09:19 ET (14:19 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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