Proxy advisers back Mylan's Perrigo quest as investor vote looms

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%.

- read Mylan's Egan-Jones and Glass Lewis releases here and here
- see its release on the acceptance condition

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

Suggested Articles

Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.

Private equity firm, in exclusive talks with Sanofi, says it'll invest to pump up Zentiva into an "independent European generics leader."

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.