Is Mylan NV (NASDAQ:MYL) Desperate For Perrigo (PRGO) Deal?

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In a move that seems to show desperation for a deal, Mylan NV (NASDAQ:MYL) has moved to lower the shareholder acceptance requirement to approve an acquisition. The company is planning a hostile bid for Perrigo Company plc Ordinary Shares (NYSE:PRGO). Previously, a buyout deal required not less than 80% of Mylan’s shareholders backing to go through, but that has been reduced to not less than 50%.

Shareholders of Mylan NV (NASDAQ:MYL) are expected to vote on the proposal to acquire Perrigo on August 28. Thereafter, Mylan plans to initiate a buyout offer for the shares of Perrigo. Because Mylan understands that its shareholders can easily shoot down its hostile bid for Perrigo, the company has taken an early measure to clear its path.

According to Mylan’s executive chairman, Robert Coury, the latest action further demonstrates their commitment to acquire Perrigo.

Controversial deal

While more than 80% of shareholder approval may be tough to attain for a controversial bid, Mylan believes more than 50% is an attainable threshold.

Both Mylan and Perrigo are pharmaceutical companies, with Mylan being more into generic drugs. The combination of Mylan and Perrigo is expected to lead to the creation of one of the largest generic and over the counter drugmakers in the world.

$34.1 billion buyout price

For several months, Mylan NV (NASDAQ:MYL) has tried to strike a buyout deal with Perrigo without success. The management of Perrigo has rejected several offers from Mylan, prompting the latter to pursue a hostile takeover. Mylan sweetened its offer for Perrigo in April, offering the Dublin-based Perrigo $232.23 a share in cash and stock, which comes to a total of $34.1 billion.

Mylan is launching a hostile bid for Perrigo at a time when it has itself rejected several buyout overtures. Israeli drug company Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) failed to close a deal with Mylan after several pursuits.

Mylan shifted its base to the Netherlands from the U.S. under what has come to be known as tax inversion.

Neha Gupta

Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.

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