Perrigo CEO: Think Mylan's buyout will come easily? Think again

Perrigo CEO Joseph Papa

Perrigo ($PRGO) has stayed quiet since Teva ($TEVA) dropped its hostile pursuit of Mylan ($MYL), choosing instead to snap up Allergan's generics business for $40.5 billion. Mylan's shares plummeted on that news. And now, Perrigo has broken its silence--and the word isn't what Mylan wants to hear.

Perrigo CEO Joseph Papa stuck to his company's prior stance that Mylan's $205-per-share bid "substantially undervalues" its business--and "the market movement following Teva's announcement last week only reinforced" that conviction, he said during the company's Q2 earnings call.

And if Mylan shareholders vote--at a special meeting later this month--to push forward with the Perrigo deal anyway? "If they proceed with a tender offer for Perrigo, this will not be the easy path that some are painting it to be," he said, pointing out that the bar for success in the tender offer process is 80% of all outstanding Perrigo shares. " … We'll make a strategic decision with the board about what's the right thing to do for the company," he said.

The way some analysts see it, that's still a big "if." As Leerink Partners' Jason Gerberry wrote in a recent note to clients, Mylan would have to bring its bid to about $230 per Perrigo share to make an "acceptable" offer for its target. And even if it can muster that, the potential tie-up "does not appear to create any value at prices above $205," Cowen & Co. analyst Ken Cacciatore wrote late last month.

Meanwhile, Mylan topped Q2 earnings forecasts Thursday, posting EPS of 91 cents--2 cents better than analysts expected. Revenue of $2.37 billion fell short of analysts' $2.39 billion forecast, however, despite year-over-year growth of 29%.

- check out Mylan's release
- see the call transcript from The Street

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

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