Some Teva shareholders have argued that the company is overpaying in its $41-billion acquisition of Allergan's global generic drugs business, Financial Times reported Sunday.
"Teva massively overpaid in the neighbourhood of 25 percent," one investor remarked, adding "the question is not whether it's the right deal, or a good deal — but whether they paid the right price."
Meanwhile, a separate investor accused the company of doubling down on generic drugs at the wrong time, adding that the company should have used the cash to push further into branded therapies.
"Some people believed it wasn't the best deal, that simple generics are not the right way to go because of Indian competition," noted a mergers and acquisitions lawyer, continuing "they should have concentrated on sophisticated generics, where they might have an advantage."
Completion of the deal, which followed Teva's failed pursuit of Mylan, has been delayed by antitrust concerns raised by the US Federal Trade Commission, with analysts expecting Teva to divest certain assets to complete the deal.
"Hindsight is 20/20," explained Bernstein analyst Ronny Gal, noting "soon after they did the deal the entire stock market collapsed, but comparing it at this point it's hard to argue that they wouldn't have got it for a better price."
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