Mylan Spurns Teva's $40 Bln. Offer - Update

(RTTNews) - Mylan N.V. (MYL) on Monday rejected Teva Pharmaceutical's (TEVA) $40 billion acquisition offer as it undervalues the company and carries antitrust risks, dashing Teva's hopes for a deal that will help it dominate the global generic drug space.

In a statement, Mylan said Teva's offer includes low-quality, high-risk Teva stock, and would expose Mylan to a problematic culture and leadership with poor record of delivering shareholder value.

The Dutch company also said Teva's offer carries significant antitrust risk and would result in massive consolidation of supply and manufacturing, creating implications for pricing power and shortages.

Mylan said it remains committed to its failed $32 billion offer for Perrigo Co plc (PRGO).

Following the announcement, Mylan shares shed more than 4 percent in morning trade, while Teva stock was down about 3 percent.

Mylan's rejection marks a series of unsuccessful takeover efforts involving Teva, Mylan and Perrigo, as companies clamor for deals that would give them a foothold in the generic drug space.

On April 21, Israel-based Teva proposed to buy Mylan for $82.00 per share, comprising about 50 percent cash and 50 percent stock, and the announcement sent Mylan shares soaring. The Teva offer was conditional to Mylan backing away from its offer to buy Irish drug maker Perrigo (PRGO).

Soon after, Mylan launched a formal offer to buy Perrigo for about $32 billion, comprising $60 in cash and 2.2 Mylan shares per Perrigo share; an increase from its initial failed bid for Perrigo of $205 per share in cash and stock, or $28.9 billion.

Perrigo, however, rejected the formal offer.

Meanwhile, Teva reiterated its commitment to buy Mylan, saying the deal, apart from providing strong premium and immediate value for Mylan stockholders, also presents an unparalleled opportunity to participate in upside potential.

"While we are disappointed that Mylan has formally rejected our proposal, the Teva Board and management team are fully committed to completing the combination of Teva and Mylan, and we stand ready to quickly complete a transaction that is compelling for both Teva and Mylan stockholders," said Teva CEO Erez Vigodman.

Mylan, with about 25,000 employees, had $929.4 million in net income and $7.7 billion in revenue in 2014.

MYL is trading at $72.78, down $3.28 or 4.31%, on a volume of 11.5 million shares on the Nasdaq.

TEVA is trading at $62.62, down $1.80 or 2.79%, on a volume of 3.5 million shares on the NYSE.