Mylan chairman to Perrigo: You can't stop takeover

Mylan chairman Robert J. Coury
Mylan chairman Robert J. Coury

Robert Coury says it's down to Perrigo's shareholders to decide and "management has no role to play in the process."

"Perrigo shareholders should understand that the final outcome rests solely with them, not with Perrigo's management or Board," Mylan N.V. chairman Robert Coury wrote in an open letter addressed to Perrigo Company (NYSE:PRGO; TASE:PRGO) chairman and CEO Joseph Papa. Mylan is trying to take over Perrigo, but the Perrigo board of directors opposes the deal, arguing that it undervalues Perrigo. Coury wrote, "You and your Board are now unable to stop the combination… at this point Perrigo's management has no role to play in the process."

Mylan officially announced its intention to acquire Perrigo in April. After Mylan shareholders approved the deal at the end of August, Mylan announced yesterday that it would submit a binding acquisition bid on September 14 (as required by the legal timetable). In his letter, Coury called on Papa and the Perrigo board to discuss the deal with Mylan. At the same time, Coury also noted that the discussions would not concern the price for the deal, because any change in the price would require new approval from Mylan's shareholders. At Mylan's current price, the resulting price for a Perrigo share in the deal is $187 (a total of $27.5 billion for the company), a 3.5% premium on the current Perrigo share price in the market, but lower than the original price of $205 mentioned by Mylan in April.

Coury did not ignore the question of the price, noting that since the first offer was made in April, the Dow Jones Industrial Average had fallen from 18,000 to 16,000 points. "If you had been trading in line with the market and other health care stocks, Perrigo's stock would be trading at around $150 per share (compared with the current $180 market price, S.H-V)… Perrigo's stock has been protected from the recent sell-off in the markets, solely as a result of our offer," Coury states in his letter, predicting that if the deal fails, Perrigo shareholders stand to lose from a $30 (17%) drop in the share price.

If not complete ownership, then only a controlling interest

It is possible that Mylan will obtain approval of a majority (50%) of Perrigo's shareholders, enabling it to become the controlling shareholder in Perrigo, but not the 80% majority required for complete ownership of the company. In this case, Mylan plans to delist the Perrigo share from Nasdaq and the Tel Aviv Stock Exchange (TASE), so that Perrigo shareholders who do not sell their shares are liable to be stuck with non-negotiable minority holdings. According to securities law, a dual-listed share can be delisted from the TASE relatively easily, as long as it is still traded on an overseas stock exchange, unless Mylan also plans to delist the Perrigo share from trading in the US.

The Israel Securities Authority declined to comment at this stage on the subject in response to a question from "Globes."

Published by Globes [online], Israel business news - - on September 9, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Mylan chairman Robert J. Coury
Mylan chairman Robert J. Coury
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018