Teva-Mylan-Perrigo merger merry-go-round keeps turning

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Observers are waiting with bated breath to see whether Mylan will be tempted to accept Teva’s $40 billion takeover bid, days after saying it thought such a combination had no “sound industrial logic or cultural fit” and just after its own unsolicited $28.9 billion offer for Perrigo was turned down. 

Earlier this week, Teva offered $82.00 per share, split between cash and stock, saying that a tie-up with Mylan would create a company “well-positioned to transform the global generics space”. The proposal represents a 38% premium to the stock price of Mylan on April 7, the day before the latter made the bid for Perrigo.

Teva says its offer provides Mylan stockholders with “a significantly more attractive alternative” to buying Perrigo, and the combined company would have pro forma 2014 revenues of $30 billion and pretax earnings of $9 billion.

Mylan, which earlier adopted a poison pill measure to deter unsolicited approaches, had previously responded to speculation by saying it was not convinced by a Teva deal and it committed to acquiring Ireland-domiciled Perrigo. Then things were complicated yet further by the latter’s board unanimously rejecting the bid.

Mylan has yet to respond to Teva’s approach and many analysts believe the Israeli group will have to make a higher bid to turn its rival’s head. Another attempt by the former to buy Perrigo is also a possibility so it promises to be another busy week or so in merger-mania land.