Teva Pharmaceutical Industries is engaged in mounting a takeover bid for Mylan Inc. which could be the biggest in the drug field this year.
The Israel-based drug giant said on Wednesday it could “promptly” divest some operations if necessary to obtain regulatory clearance for its proposed takeover of smaller rival Mylan. It did not say which operations it could be ready to divest.
Teva unveiled an unsolicited $40 billion bid on Tuesday for Mylan in an attempt to ease pressure for new revenue sources. The company confirmed that it offered to acquire all of the outstanding shares of generic pharmaceutical maker Mylan at an offer of $82 per share, in a 50% cash and 50% stock deal, a 20.5% premium over Monday’s closing price.
Barclays Bank is said to be working with Teva on the bid for Mylan, which has a current market cap of $33.3 billion, and other banks are also involved in financing the deal.
Meanwhile, on the Mylan side, rejection by the board of directors of Perrigo Company of Mylan’s offer to buy all its shares for $29 billion, mades it more vulnerable to Teva’s move, according to Globes. Teva officials had indicated that its takeover of Mylan might not happen if the latter reached a deal with Perrigo.
The Perrigo turndown came just hours after Teva’s $41 billion bid.
Teva has been faced with resistance from Mylan’s board of directors, which had previously said that it would be opposed to a buyout by Teva. Mylan’s chief executive said on Friday that a merger with Teva would be a bad fit.
But the Israeli drug giant has been moving forward on the deal with professed confidence:
Teva president and CEO Erez Vigodman said, “Our proposal is compelling for both Teva and Mylan stockholders and other stakeholders. Our proposal would provide Teva stockholders with very attractive strategic and financial benefits and Mylan stockholders with a substantial premium and immediate value for their shares, as well as the opportunity to participate in the significant upside potential of the combined company one that would transform the global generics space and leverage it to hold a unique leadership position in the pharmaceutical industry. We have long respected Mylan’s business, and we are confident that Mylan’s Board of Directors and stockholders will agree that our proposal represents a significantly more attractive alternative for Mylan and its stockholders than Mylan’s proposed acquisition of Perrigo.”
Vigodman added, “The combination of Teva and Mylan is a truly unique opportunity to build upon both companies’ solid foundations. Bringing the two together will create a much stronger, more efficient platform to achieve our goals. As one company, we would have the infrastructure and capabilities to faster pursue a differentiated business model, fully integrating specialty and generics drugs with products, devices, services and technologies to meet the evolving needs of patients and customers.”
In addition, Reuters reported that some of Mylan’s top investors, including Paulson and Co, are encouraging its board of directors to consider Teva’s proposal.
Shares in both drugmakers, Teva and Mylan, jumped in pre-market trade in New York on after Bloomberg reported that Teva could make a public unsolicited offer for Mylan as early as Tuesday.