In an affront to Teva, Mylan hikes Perrigo offer past $31B

Mylan Chairman Robert Coury

Mylan ($MYL) sent a message to Teva ($TEVA) that it wasn't interested in becoming bait even before the Israeli drugmaker made its $40 billion bid earlier this week. Now, it's repeating that message loud and clear--and it's doing so with a sweetened offer for Irish target Perrigo ($PRGO).

The generics maker is willing to fork over $60 in cash and 2.2 shares for each Perrigo share, it said Friday morning--an offer worth about $31.2 billion, or $222.12 per share, Bloomberg notes. It's an 8% improvement on the $205 per share Mylan offered up earlier this month--a proposal Perrigo said "substantially undervalues" the company and its growth prospects when it rejected it earlier this week.

"While we are disappointed by the decision of the Perrigo board to reject our proposal without entering into discussions thus far, we are still hopeful and confident that we can engage with their board about our offer and how to best bring our organizations together," Mylan Chairman Robert Coury said in a statement.

It's a slap in the face for Teva, which Tuesday put forth a $40 billion bid for its generics rival. That offer, it said, was contingent on Mylan not going through with its Perrigo transaction--or any other transactions, for that matter.

But Teva had some advanced warning that Mylan might not take too kindly to the prospect of cozying up. Last week, Coury said in a statement that a match between the two was "without sound industrial logic or cultural fit," reiterating Mylan's commitment to a standalone path and once again expressing the company's enthusiasm for a Perrigo buy.

Still, though, some analysts--including Bernstein's Ronny Gal--think Teva will ultimately prevail. As he wrote in a Thursday note to investors, he thinks the Petah Tivka-based pharma will ultimately boost its offer for Mylan from $82 to $90 a share. And with the value of Teva's stock accretion, that price "would be substantially higher than what Mylan shareholders can expect from a Perrigo combination," he said.

- read Mylan's release
- see Bloomberg's take

Special Reports: Top 10 generics makers by 2012 revenue - Mylan - Teva | Pharma's top 10 M&A deals of 2014

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