Generic pharmaceutical company Mylan N.V. (MYL) today officially announced a reduction in the approval requirement for the Perrigo Company (NYSE:PRGO; TASE:PRGO) deal from 80% to 50%. This means that under certain circumstances, Mylan could settle for acquiring control of Perrigo, without acquiring full ownership of the company.
Mylan said that it now had to obtain the agreement of 50% of Perrigo's shareholders for the offer to purchase it intends to make. Mylan last week announced that it had obtained the consent of the financing banks for this measure, and was now announcing this officially.
At the same time, before making its offer to purchase, Mylan must obtain the consent of its own shareholders, for which it has summoned a shareholders meeting on August 28. According to Mylan chairman Robert Coury, "Mylan is committed to the completion of the acquisition of Perrigo, and the current step proves it. We're preparing to submit the offer to purchase to Perrigo's shareholders as soon as we get approval from our shareholders meeting, and we expect to make this combination a reality in the coming months."
Mylan is seeking to take over Perrigo in a $30 billion deal, but Perrigo's board of directors opposes the takeover. Assuming that the requirement is lowered and over 50% of Perrigo's shareholders accept Mylan's offer, the minority shares will continue to be listed on both Nasdaq and the Tel Aviv Stock Exchange (TASE). If Mylan later wishes to obtain full ownership of Perrigo, it will have to wait six months before submitting another offer to purchase.
Perrigo regards a scenario of control of this type as a risk. In a presentation by Perrigo last week to the US Securities and Exchange Commission (SEC), Perrigo wrote, "Any reduction of the approval ration below 80% will create significant risks." Perrigo alleges that this could delay Mylan's achievement of synergy, and create operating risks. Perrigo also expects uncertainty regarding its debt, such as damage to its credit rating or the exercising of a clause about a change in the company's ownership.
Published by Globes [online], Israel business news - www.globes-online.com - on August 13, 2015
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