What Are The Other Options The Mylan NV (MYL) CEO Is Talking About?
The pharmaceuticals industry is undergoing the consolidations process through M&A. Mostly M&A happens with the consent of the both the concerned parties with the backing of the biggest shareholders. Though there are hostile bids seen in the past, everything did not succeed. Therefore, it was not a surprise when Mylan NV (NASDAQ:MYL) bid for Perrigo Company plc Ordinary Shares (NYSE:PRGO) for $34 billion. However, its CEO, Heather Bresch, recent comments on other options brought out some interesting factors.
Implications Of Comments
The latest comments assumed a lot of significance. That is because only in a recent interview, Bresch indicated that the acquisition of Perrigo was significant and that she was confident of closing the deal before the year ends. However, it is not an unusual thing for companies like Mylan NV (NASDAQ:MYL) to have other options since the objective is to create value. That could come either from the acquisition of Perrigo Company plc Ordinary Shares (NYSE:PRGO) or somewhere else also.
No one could forget that Mylan itself was a target of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) till very recently. Though the company rejected the hostile offer, the threat was hanging on it till the Israeli firm changed its tactics to buy the generic business of Allergan PLC (NYSE:AGN) for $40.1 billion. Till Teva disclosed its decision, there was no hint of having another option while it was applying pressure on Mylan.
Therefore, pharmaceutical companies talking about other options are not avoidable. They appeared to have more than one option to pursue their strategies. As far as Mylan NV (NASDAQ:MYL) is concerned, acquiring Perrigo Company plc Ordinary Shares (NYSE:PRGO) is a first choice. However, the company’s CEO, Bresch, is also very clear that it is not a must. Therefore, she must be having few other options, which need not have to be a full acquisition of a firm.
For instance, Pfizer Inc. (NYSE:PFE) might be taking a decision late next year about the possibility of selling its established products segment. Bresch confirmed that she would definitely look into that. It is a different thing that Pfizer is also looking for the right kind of M&A candidate that will drive its growth prospects.
Bresch need not have to name the company that she is looking for an acquisition. However, one can take a cue from Perrigo Company plc Ordinary Shares (NYSE:PRGO)’s assets. The company will bring in animal health treatments, generic topical medicines, and OTC consumer products. The same assets or other assets can be acquired from other companies, which are interested in selling them. That might sometime prove to be beneficial for the company too.
Also, Mylan NV (NASDAQ:MYL)’s CEO, Bresch, comments of other options could also be termed as a tactical pressure from its shareholders to agree for the acquisition. It had its effect on the stock price of Perrigo. While Bresch said that she will not sweeten the bid, it is a fact that the premium payable in biotech M&A has become more expensive. Pfizer Inc. (NYSE:PFE) said that it was not aggressive because of that reason. Therefore, there is nothing wrong in pursuing other options.
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