Starboard Discloses 4.6% Stake In Perrigo

(RTTNews) - Starboard Value LP announced a 4.6% ownership stake in Perrigo Company plc (PRGO). It believes changes are needed to reverse the trajectory of poor operating and financial performance and reposition Perrigo for future success.

Separately, Perrigo acknowledged receipt of a letter from Starboard Value LP, a Perrigo shareholder. Perrigo said it will review the letter carefully and looks forward to a constructive and productive dialogue with Starboard .  Perrigo also reiterated its commitment to disciplined execution; transparency with its shareholders customers, and employees; and, above all, to delivering value for its shareholders. 

In a letter to Perrigo's Chief Executive Officer, John Hendrickson, Starboard said that it believes that Perrigo is deeply undervalued and significant opportunities exist to create value for the benefit of all shareholders based on actions that should be within the control of management and the Board of Directors.  

In April 2015, Mylan made an unsolicited proposal to acquire Perrigo for cash and stock worth approximately $205 per share, more than a 25% premium at that time. Even at current market prices for Mylan shares, this combination would have resulted in a current value of approximately $167 per share, or 88% more than the current Perrigo stock price of approximately $89. Management and the Board went to great lengths to oppose this proposed combination, spending more than $100 million in advisor fees relating to its defense, and promising shareholders that their standalone strategy would produce more value than the transaction given the robustness of Perrigo's future prospects. In order to convince Perrigo shareholders to reject Mylan's offer, management and the Board made aggressive promises of drastic improvements in both financial and stock price performance.

"Unfortunately, since that time, results have gone decidedly in the wrong direction, and management's promises have been woefully unfulfilled," Starboard said.