Mylan fires back at Perrigo lawsuit with counterclaims of 'misleading' statements

Mylan and Perrigo's warring words have turned into warring lawsuits. After Perrigo sued last week to block Mylan's proposed takeover, saying the would-be buyer had misled shareholders, Mylan countersued, alleging its own set of "false and misleading statements."

Mylan ($MYL) asked a federal judge to order Perrigo ($PRGO) to correct those allegedly false statements. Perrigo wants the same judge to order Mylan to do the same.

It's just the latest clash between the two companies since U.S.-based Mylan first offered to buy Perrigo earlier this year. Perrigo, which specializes in store-brand over-the-counter meds, says Mylan's offer undervalues the company, and contends that the two aren't a good fit anyway. But Mylan has forged ahead, tweaking its offer repeatedly and issuing letter after letter touting the combination.

Mylan's latest bid--$75 in cash and 2.3 of its shares in return for each Perrigo share--is now worth about $182.30, Reuters calculates, based on Mylan's closing price Tuesday. Perrigo shares were trading down at $171.97. The offer expires Nov. 13.

Perrigo CEO Joseph Papa

In its countersuit, Mylan attempts to make hay out of a disclosure last week that Perrigo CEO Joseph Papa had invested $220,000 in Mylan shares in March. Since then, Papa "inundated" Perrigo shareholders with false statements about the proposed deal, the lawsuit states.

Meanwhile, Perrigo alleges a series of misleading statements from Mylan. According to Perrigo's suit, Mylan exaggerated the potential synergies--in costs and sales--that it could achieve through a merger. Mylan also tried to twist shareholders' arms by falsely claiming that it could delist Perrigo stock even if the tender offer didn't bring in the required percentage of shares to consummate a deal, the suit contends.

While the lawsuits make their way in court, Perrigo continues to urge its shareholders to reject the deal. Some analysts figure that Mylan's offer remains too low to tempt enough Perrigo shareholders; for instance, Citi analysts wrote in a note to clients last week, and it's the implied valuation of Mylan's bid that is "likely to constitute the primary hurdle to Perrigo shareholder support for the transaction." Others, including BMO Capital Markets analyst David Maris, have said that Perrigo "is better off without Mylan," echoing Perrigo's contention that estimates of merger-related cost savings are too high.

- read the Reuters news

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

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