Perrigo Rejects Mylan’s Acquisition ProposalBy
Perrigo Company plc announced that its board of directors has unanimously rejected the unsolicited proposal from Mylan NV, disclosed April 8, 2015, to acquire all of the outstanding shares of Perrigo for $205.00 per share or approximately $40 billion. “Following a thorough review, advised by its financial and legal advisors, the board unanimously concluded that the proposal substantially undervalues the company and its future growth prospects and is not in the best interests of Perrigo’s shareholders,” said Perrigo in a statement issued on April 21, 2015.
In rejecting Mylan’s proposal, Perrigo said that the offer did not sufficiently reflect its near-term growth prospects, recent acquisition activity, and pipeline potential. Specifically, Perrigo said that the proposal: does not reflect the company’s three-year organic net sales compound annual growth rate (CAGR) goal for calendar 2014 to 2017 of 5-10%; does not take into account the full benefits of the Omega Pharma acquisition (an European over-the-counter (OTC) company), which closed on March 30, 2015, including additional value to be derived from synergies and increased global presence; and does not take into account Perrigo’s innovative new product pipeline, which is expected to generate nearly $1 billion in net sales over the next three years, excluding upside from potential new indications for Tysabri (natalizumab), a drug to treat multiple sclerosis, from which Perrigo receives royalties on in-market sales from Biogen as part of Perrigo's $9.5 billion acquisition of Elan in 2013.
Joseph C. Papa, Chairman, President and CEO, said in a statement: “The Board believes the Proposal substantially undervalues Perrigo and its growth prospects and that continued execution by the management team against our global growth strategy will deliver superior shareholder value. Perrigo has a long history of driving above market shareholder value through consistent growth with a focus on profitability and operational excellence, which is reflected in our organic net sales CAGR goal of 5-10% for the next three years. With the acquisition of Omega Pharma, we are a top five global OTC company with a diversified portfolio, a leading market position in key franchises and a strong and established global distribution platform. We will continue to capitalize on our durable competitive position by expanding our international platform organically and through future synergistic deals. These actions will advance our leadership in the global OTC marketplace.”
Mr. Papa continued, “Perrigo’s board believes that the company has a strong independent future and is well positioned to continue to drive superior growth and shareholder value and provide high ‘Quality Affordable Healthcare Products’ to customers and consumers globally. The board’s confidence is built upon the company’s durable competitive position, compelling growth strategy, and strong and consistent track record of delivering results for shareholders under its experienced management team. Since fiscal 2007, we have delivered compound annual sales growth of 16%, increased adjusted operating margin by over 1,600 basis points, and generated total shareholder returns of over 970%.”
Perrigo advised its shareholders to take no action in relation to the Mylan’s proposal.