Perrigo said Tuesday that its board unanimously turned down Mylan's unsolicited $28.9-billion offer , saying the merger proposal "substantially undervalues the company and its future growth prospects." According to Perrigo CEO Joseph Papa, the board believes the drugmaker "has a strong independent future and is well positioned to continue to drive superior growth."
Specifically, Perrigo said the offer fails to account for its "leading market position in key franchises," as well as its recent acquisitions, including a deal  last year to buy Omega Pharma for $4.5 billion. Perrigo relocated its domicile to Ireland in 2013 via its $8.6-billion takeover  of Elan. The drugmaker also said Mylan's offer does not fully take into account that its product pipeline is expected to generate nearly $1 billion in net sales over the next three years, "excluding sizable upside from potential new indications for [the multiple sclerosis drug] Tysabri."
Papa further remarked that "continued execution by the management team against our global growth strategy will deliver superior shareholder value." The drugmaker recommended that its shareholders take no action on Mylan's non-binding proposal, which is valued at $205 per share in cash and stock, adding that there is no guarantee Mylan will make a firm offer.
The announcement follows Teva's disclosure earlier on Tuesday that it made a proposal  to acquire Mylan for $82 per share, or about $40.1 billion in cash and stock, so long as the company abandons its pursuit of Perrigo. The Israeli drugmaker's rumoured interest in Mylan resurfaced in a report  last week, in response to which Mylan's executive chairman Robert Coury said a merger with Teva "is without sound industrial logic or cultural fit" and would be "unlikely…[to] obtain antitrust regulatory clearances." However, the company indicated that it would consider an offer if Teva made one.
For related analysis, see ViewPoints: Agree to disagree – will FTC considerations scupper a Teva-Mylan deal?  and ViewPoints: Mylan begins courting Perrigo – is offence its best defence against Teva? .