|Mylan Chairman Robert Coury|
Mylan hopes its shareholders vote in favor of its hostile bid for Ireland's Perrigo ($PRGO). And it got a boost on Wednesday that may help convince them to do so at a shareholder meeting later this month.
Leading proxy advisory firms Egan-Jones and Glass Lewis both recommended that Mylan ($MYL) shareholders support the proposed acquisition. Egan-Jones pointed to Mylan leadership's track record with integrations and a "shared culture … of integrity, respect and responsibility," Mylan said, while Glass Lewis highlighted the opportunities for cost-cutting and the potential increase in Mylan's valuation.
The recommendations serve "as further affirmation of the sound strategic and financial rationale behind this combination," Mylan Chairman Robert Coury said in a statement. "We are confident that this transaction will create compelling value for both Mylan and Perrigo shareholders … and that our shareholders will vote in favor[.]"
Analysts aren't so sure. Leerink Partners' Jason Gerberry has said Mylan lacks the "financial firepower" to put an "acceptable" offer for Perrigo on the table. And Bernstein's Ronny Gal puts the odds of a transaction happening below 20%.
"Mylan offers insufficient premium over Perrigo standalone share price to justify tendering-in shares, especially if Perrigo conducts shareholder value-enhancing steps," Gal wrote in a Tuesday investor note.
If Mylan does push on, though, it'll seek a lower threshold for support from Perrigo's investors. Initially, it said it would look for backing from more than 80% of Perrigo's shareholders--a mark it announced on Thursday it had changed to 50%.
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