Hours after receiving new bid, Perrigo tells Mylan to take a hike

That was fast.

Just a couple of hours after Mylan ($MYL) sweetened its original bid for Ireland's Perrigo ($PRGO) to $31 billion-plus, Perrigo nixed the new offer. Why? The way the target sees it, it isn't quite so sweet.

Friday's proposal puts forth a price that's actually lower than the $205 per share bid it's already rejected, Perrigo argued Friday. "Based on Mylan's unaffected price of $55.31 per share on March 10, 2015, the last day of trading prior to widespread public speculation that Teva was considering an offer for Mylan, the value of the offer is $181.67 per Perrigo share," it said.

It's bad news for Mylan, which is working to escape its own takeover bid from generics rival Teva ($TEVA). On Tuesday, the Israeli drugmaker offered up $40 billion--contingent on Mylan not going through with any other M&A action.

Mylan Chairman Robert Coury

Mylan's not so fond of the idea, and it made that clear before the bid even arrived. A tie-up between the copycat drugmakers is "without sound industrial logic or cultural fit," Mylan Chairman Robert Coury said in a statement last week.

But Teva begs to differ. While the two companies are developing knockoffs of each other's lead products--Teva's Copaxone and Mylan's EpiPen--it's dismissed the idea that business overlap between the companies could thwart a buyout.

"Teva is confident that it would be able to structure a transaction that would not contain material impediments to closing and that it can determine and promptly implement divestitures, as necessary, to gain regulatory clearances," it said.

And at least some analysts seem to think it's possible, too. "We think a Teva for Mylan deal is the more likely scenario and the one that will reward shareholders most," RBC Capital Markets analyst Randall Stanicky wrote in a note to clients on Friday.

- read Perrigo's release

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

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