UPDATED: You want a formal offer, Mylan? Teva could have one this week

Mylan chairman Robert Coury

Last month, Mylan Chairman Robert Coury challenged suitor Teva ($TEVA) to either put up a formal bid or step aside and let his company proceed with its plan to pursue its own target, Perrigo ($PRGO). And he may be getting what he asked for.

The Israeli drugmaker is reportedly preparing to hike its original bid for its generics rival--to between $86 and $88 a share, up from the $82 it offered in April--and that offer will be a formal one, Bloomberg reports. Teva may announce the sweetened bid as soon as this week, its sources say.

Such a proposal would work out to about $43 billion for Mylan ($MYL), a price that still makes a deal look "highly accretive," Leerink Partners analyst Jason Gerberry wrote in a note to investors on Tuesday.

"We view a deal consummated below $95 a share as favorable for Teva," he wrote.

But Mylan has previously said that price isn't its problem with a potential Teva tie-up. Teva is the "wrong company" to buy it, Mylan has insisted, promising that, a) any Teva deal will have to be done on a hostile basis, and b) management will make sure a hostile deal takes years.

The way Teva sees it, that's not how Mylan should treat its investors. Avoiding Teva's advances and refusing to come to the table is putting shareholders in a "tough place" as Mylan steers them toward Perrigo, Teva CEO Erez Vigodman and Chairman Yitzhak Peterburg wrote to Coury last month.

So Teva intends to give investors the choice themselves. A formal offer will pose an alternative for proxy advisers to consider--and, Teva hopes, recommend to shareholders before they meet this summer to vote on the Perrigo transaction, Bloomberg notes.

Meanwhile, Perrigo isn't exactly thrilled with Mylan's acquisition idea, either. The Irish drugmaker has already shot down three offers from the Netherlands-based company, arguing that they "significantly undervalue" its business. And some analysts have their own problems with the proposition, too. "Mylan still hasn't made a convincing case for achieving Perrigo cost synergies," Gerberry wrote Tuesday.

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