|Abbott CEO Miles White|
Mylan ($MYL) can breathe a little easier knowing it has support from its largest shareholder in its quest to pick up Perrigo ($PRGO). After all, it's not just a big buyout at stake--but the opportunity to thwart its own unwanted takeover by generics rival Teva ($TEVA).
On Tuesday, Abbott ($ABT) CEO Miles White said his company intends to vote its 14.5% Mylan stake in favor of a Perrigo buy.
"Abbott has considered the entire situation and we believe Mylan's standalone strategy and acquisition of Perrigo will further enhance its platform, is strategically compelling, value enhancing for shareholders, and offers a clear path to completion," White said in a statement.
Abbott acquired its Mylan stake in late February, when the two companies closed a $5.3 billion stock swap for a sizable chunk of the Illinois company's drug business in developed countries outside the U.S. The following month, it sold off nearly a third of its holding, putting 35 million of its approximately 110 million shares on the block.
For Mylan, the Abbott portfolio buy allowed it to complete a tax inversion--a matter that's currently complicating its efforts to fend off Teva. Mylan claims the stake Teva recently built up violates U.S. antitrust laws--but that hardly matters considering Mylan's Dutch locale, the Israeli drugmaker argues.
"We note that you have been saying you are a Dutch company when you believe it helps you create unprecedented governance structures, a U.K. company when it helps you lower your U.S. taxes and a U.S. company when you believe it helps you prevent Teva from purchasing Mylan shares," Teva's leaders wrote in a letter to Mylan Chairman Robert Coury last week.
And while Abbott may be on board the Mylan-Perrigo train, it's notably missing one key passenger: Perrigo itself. The OTC-focused drugmaker has so far repeatedly turned down Mylan's offers, noting that they "substantially" undervalue the company.
- read Abbott's release
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