Mylan Makes Nearly $29 Billion Proposal to Acquire Perrigo

Mylan N.V. has made a proposal to acquire Perrigo Company plc in a cash-and-stock transaction in a deal valued at approximately $28.9 billion. Under the terms of the non-binding proposal, which was delivered to Perrigo’s chairman on April 6, 2015, Perrigo shareholders would receive $205 in a combination of cash and Mylan stock for each Perrigo share, which represents a greater than 25% premium to the Perrigo trading price as of the close of business on Friday, April 3, 2015 (the last trading date prior to the date of Mylan’s proposal), a greater than 29% premium to Perrigo’s sixty-day average share price, and a greater than 28% premium to Perrigo’s ninety-day average share price.

Mylan’s Executive Chairman Robert J. Coury commented in a company statement: “This proposal is the culmination of a number of prior discussions between Mylan and Perrigo about the compelling strategic and financial logic of this combination. This combination would result in meaningful immediate and long-term value creation, and our proposal is designed to deliver that value to shareholders and other stakeholders of both companies. We have great respect for Perrigo’s board and management team and what they have built. We look forward in the weeks ahead to working with them to capitalize on this tremendous opportunity and working together to create a unique leader with a one-of-a-kind profile in our industry.” The combined company would have a focus in in specialty brands, generics, over-the-counter (OTC), and nutritional products with approximately a combined $15.3 billion in 2014 pro forma sales.

Perrigo is headquartered in Dublin, Ireland, and Mylan’s proposal is subject to Irish Takeover rules and is not a firm offer, but a non-binding proposal to acquire Perrigo. Mylan’s proposal is subject to the pre-condition of confirmatory due diligence, which pre-condition may be waived by Mylan at its discretion. “The announcement is not an announcement of a firm intention to make an offer under rule 2.5 of the Irish Takeover Panel Act, 1997, Takeover Rules 2013 and there can be no certainty that an offer will be made, even if the due diligence pre-condition is satisfied or waived,” said Mylan in a statement. “A further statement will be made if and when appropriate.”

In making its proposal to acquire Perrigo, Mylan also outlined its recommendation for executive management of the combined company. Mylan suggested that the combined company be lead by co-chairmans, Robert J. Coury, currently executive chairman of Mylan, and Joseph C. Papa, now president, chief executive officer and chairman of Perrigo. It also suggested that Mylan CEO Heather Bresch continue in the role as well as Mylan President Rajiv Malik. In a letter to Papa from Coury, Mylan also highlighted current Perrigo members to the senior management team of a combined company. “Our Board also has great respect for your senior management team, and we envision the combined company leveraging the best of our collective management and employee talent,” said Coury in his letter to Papa. “To that end, we are hopeful that, among others at Perrigo, Judy Brown [executive vice president and chief financial officer] and Todd Kingma [Executive Vice President, General Counsel and Secretary] would be willing to serve in important roles with the combined company. We also envision important roles in the combined company for members of Marc Coucke’s [founder of Omega Pharma] Omega Pharma management team. We look forward to exploring with you other ways of maximizing the benefits to our shareholders and other stakeholders presented by combining these two very strong management teams.”

In a statement, Perrigo acknowledged receipt of Mylan’s proposal, but did not comment further. “Perrigo confirms that it has received an unsolicited, indicative proposal from Mylan regarding a possible offer for the company,” said the company in a statement. The Board of Perrigo will meet to discuss the Proposal and a further announcement will be made when appropriate. There can be no certainty that any offer will be made.

Source: Mylan and Perrigo

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