Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has officially announced that it is withdrawing its bid to buy generic pharmaceuticals rival Mylan N.V. after agreeing to buy Allergan Generics for $40.5 billion. This leaves Teva with a 4.6% stake in Mylan, which it bought for about $1.6 billion, as part of its hostile takeover bid.
Teva offered to buy Mylan for $82 per share and bought its stake at prices between $69-74 per share. After Teva's announcement today Mylan's share price has fallen back to $58 per share on premarket trading on Nasdaq, leaving Teva with a $300 million loss "on paper."
But it remains unclear when Teva will sell the shares. Teva simply said, "Teva intends to review its options with respect to its ownership of approximately 4.6% of the outstanding ordinary shares of common stock of Mylan."
On the withdrawal of Teva's offer CEO and president Erez Vigodman said, "In light of our strategic acquisition of Allergan Generics, which will transform the industry, our Board and management team has decided that withdrawing the proposal to acquire Mylan is in the best interests of Teva stockholders. Since announcing the proposal to acquire Mylan on April 21, 2015, we have appreciated the opportunity to talk with many of our investors about the future of the generics industry, and we are confident our proposed transaction with Allergan best positions Teva to succeed in today’s industry landscape.”
He continued, “We continue to believe that a combination of Teva and Mylan would have made sense for our companies, our respective stockholders and the healthcare industry as a whole. However, despite our clear commitment to consummating a transaction, and our conviction that we ultimately would have succeeded in acquiring Mylan, we believe we have an even greater opportunity to create compelling, sustainable value for Teva’s stockholders through our transaction with Allergan - and we acted quickly to seize the opportunity. Our agreement with Allergan will reinforce Teva’s strategy to create an even stronger business model in the industry and will position us well to grow the business and better serve our customers and patients.”
Published by Globes [online], Israel business news - www.globes-online.com - on July 27, 2015
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