Some of Perrigo's ($PRGO) shareholders have already spoken out against Mylan's ($MYL) hostile pursuit of the company. But now, Michigan Governor Rick Snyder is getting on board.
|Michigan Governor Rick Snyder|
On Tuesday, Snyder posted a statement to his social media channels expressing worries over what will happen if Perrigo investors tender their shares and Mylan gains control of the company. "I am deeply concerned about any move that would result in Perrigo eliminating both executive level and staff level positions in Michigan," he wrote.
But he's not just worried about the potential fate of Perrigo's employees. A Mylan takeover could impact the economy in the southwest part of the state and the wider community, he cautioned.
Perrigo, founded in Michigan in 1887, supports a hefty supply chain throughout the region, as well as several marketing and advertising firms--helping drive a "major slice of the local and state economy." It also has a liability of about $2.4 million in state income taxes, $12 million in payroll taxes and $3 million in local property taxes, and "I don't want to see this revenue stream lost," Snyder wrote.
The bottom line? "I urge the Perrigo shareholders to vote no on this deal and affirm that Michigan is where Perrigo belongs," he wrote.
He's not the only one who doesn't like Mylan's tender offer. In September, investor Mori Arkin spoke out against the deal, telling his fellow shareholders that if they wait a few months, they can "have the same price without the hassle and risk involved in a Mylan deal." And analysts haven't looked too favorably on it, either. Last week, Jefferies' David Steinberg wrote to clients that "we continue to see lackluster financial/strategic benefits," and RBC Capital Markets' Randall Stanicky added that he thinks Mylan's "case for a combination falls short on several points."
Nevertheless, the Netherlands-based drugmaker is forging ahead with its proposal--one it's confident includes a multiple at the "top end of the range of what the market has seen," CFO John Sheehan said on a conference call last week. While execs have said they can't yet outline how many Perrigo investors have tendered their shares, they're confident they'll gain majority control before the offer expires next month.
Mylan looks forward to working with Perrigo "to capitalize on the tremendous opportunity now available to all of us," Chairman Robert Coury said on the call. " … This is simply the right next transaction for both companies."
- see Snyder's statement
Special Reports: Top 10 generics makers by 2012 revenue - Mylan | Pharma's top 10 M&A deals of 2014 - Mylan/Abbott Laboratories established products