Teva may increase offer for Mylan to as much as $43 billion: report

According to people familiar with the matter, Teva is considering boosting its offer to acquire Mylan by as much as $2 billion, valuing the company at potentially around $43 billion, and may unveil the new proposal as early as this week, Bloomberg reported Monday. Specifically, sources indicated that Teva would offer $86 to $88 per share for Mylan, up from its initial proposal of $82 per share, or around $40.1 billion.

The sources indicated that Teva plans to submit its next bid as a formal and binding offer. After Mylan's board had unanimously rejected Teva's prior proposal in April, Mylan executive chairman Robert Coury last month urged the Israeli drugmaker to either make a binding offer or abandon its pursuit all together, while Teva accused Mylan of making "grossly incorrect statements" designed to mislead stockholders.

Netherlands-based Mylan has implemented a defensive mechanism permitted under Dutch law, allowing the company to set up an independent foundation that can acquire preferred shares with voting rights in the event of a hostile takeover. Teva has been accumulating shares of Mylan, and announced last month that its stake had reached 4.6 percent, making it eligible to legally challenge the company before the Dutch Enterprise Chamber.

Meanwhile, Mylan was rebuffed in its own ongoing pursuit for Perrigo, to which it has offered $75 in cash and 2.3 Mylan ordinary shares per Perrigo share. However, Perrigo CEO Joseph Papa suggested recently that the company would be open to entering takeover discussions (for related analysis, see ViewPoints: Come to Papa – Perrigo encourages another Mylan bid).

Mylan plans to hold a special shareholder meeting later this year to consider the Perrigo proposal, which has already received backing from Abbott, a major stakeholder in Mylan at 14.5 percent. However, Teva CEO Erez Vigodman recently reiterated that the Israeli drugmaker intends to withdraw its offer if Mylan's shareholders support a merger with Perrigo.

For further analysis, see Analysts: Teva has strong case against Mylan in Netherlands.

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