Mylan shareholders back plan for Perrigo hostile bid

Mylan NV shareholders yesterday backed the drugmaker's hostile bid for Perrigo Co, which would see it launch a tender offer for the company's shares in the next few weeks.

According to Mylan, it had the support from investors representing a majority of shares, which allowed it to directly approach Perrigo shareholders. The company was now looking for holders of over 50 per cent of Perrigo's shares to participate in the tender offer.

Mylan, a generic drug maker, launched a takeover bid for Perrigo in April for cash and stock then worth $205 (US) per share (See: Generic drug maker Mylan bids for Perrigo Co for $29 bn).

Perrigo, a maker of over-the-counter and generic medicines, rejected the offer and two sweetened offers from Mylan within a week, the last on 29 April with a cash and stock offer valued at about $242 per share, as too low and said it would do better on its own.

According to Dublin, Ireland-based Perrigo, it was confident that fewer than 50 per cent of its shares would be tendered to Mylan.

That Mylan investors backed the deal did not necessarily mean that enough Perrigo shareholders will do so, said Erik Gordon, a business professor at the University of Michigan, The Globe and Mail reported.

''The Perrigo acquisition makes sense for Mylan. The Perrigo resistance is the hard part. The benefits to its stockholders are less obvious,'' Gordon said.

The offer is now worth around $193 per share, or $28-billion, based on Mylan's latest share price of $51.49. Perrigo shares were down Thursday at $188.19.

The vote was held at a shareholder meeting in the Netherlands, where Mylan is based. According to Mylan, of votes cast at the meeting, about two-thirds backed the deal.

According to Mylan's statement Thursday, the proposal gained the support of two-thirds of votes cast, representing over half of all outstanding shares.

Mylan chairman Robert J Coury said, Mylan would take its formal offer directly to Irish-based Perrigo shareholders in ''coming weeks''.

Mylan now had until 14 September to initiate the process for acquisition of Perrigo, whose management was opposed to the deal and had called the proposal value-destructive.

''We are confident that the majority of Perrigo shareholders will not tender their shares to Mylan,'' Perrigo chief executive Joe Papa said in a statement.