Shares in Perrigo gained as much as 9.2 percent Wednesday after a source cited by StreetInsider.com suggested the drugmaker was nearing a potential deal to be acquired by an unnamed UK-based company for about $20 billion. A spokesperson for Perrigo declined to comment on the speculation.
The news follows Perrigo's recent naming of John Hendrickson as CEO in replacement of Joseph Papa, who left the company to join ValeantPharmaceuticals. In April, Perrigo lowered its profit forecast, citing pricing pressures caused by increased competition, while Hendrickson said the company's "recent track record of performance…is unacceptable."
Earlier this week, analysts at Leerink Partners suggested Perrigo could potentially spin out and merge its pharmaceutical unit with Endo International, but cautioned that such a move would be unlikely. "We believe the odds of Perrigo's structuring such a deal are low, as Perrigo views the pharmaceutical business as core and synergistic with its consumer business," the analysts explained.
Last year, Perrigo successfully resisted a hostile takeover attempt by Mylan, which has since agreed to acquire Meda for $7.2 billion. As part of its defence against Mylan, Perrigo had unveiled a plan to reduce its global workforce by 6 percent and repurchase $2 billion worth of shares.
Perrigo's sales totaled $5.4 billion last year, with 53 percent of the revenue derived from consumer health products, while generic drugs accounted for 20 percent of sales.
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