Mylan Pharmaceuticals has rejected the buyout offer from Teva Pharmaceuticals, according to a statement.
Teva had proposed to buy Mylan for $US82 per share in cash and stock in a deal worth about $US40 billion.
In the statement, Mylan said:
“After thorough consideration, Mylan’s Board unanimously determined that Teva’s proposal grossly undervalues Mylan, and would require Mylan’s shareholders to accept what we believe are low-quality Teva shares in exchange for their high-quality Mylan shares in a transaction that lacks industrial logic and carries significant global antitrust risk.”
Mylan shares spiked by more than 10% in pre-market trading last Tuesday after the Israeli company announced the buyout proposal.
In a letter, Teva’s chairman had said the proposal offered a better alternative to Mylan’s proposed acquisition of Perrigo, announced earlier this month. Mylan offered to buy Perrigo for $US205 per share in a deal worth $US28.9 billion.
Mylan shares rose by as much as 3% in early trading on Monday. Teva shares were lower but little changed.
Here’s the full statement from Mylan:
POTTERS BAR, England, April 27, 2015 /PRNewswire/ — Mylan N.V. (NASDAQ: MYL) today announced that its Board of Directors has unanimously rejected the unsolicited expression of interest from Teva Pharmaceutical Industries, Ltd. (NYSE and TASE: TEVA) to acquire Mylan, which was announced by Teva on April 21, 2015.
After a comprehensive review conducted in consultation with its financial and legal advisors, the Mylan Board concluded the approach did not meet any of the key criteria that would cause the Mylan Board to depart from the Company’s successful and longstanding standalone strategy, and consider engaging in discussions to sell the Company.
Mylan Executive Chairman Robert J. Coury commented, “Our Board has a very important fiduciary obligation to protect the best interests of the Company’s shareholders and other stakeholders, and has always been open to considering all paths forward in that regard, and this situation is no different. However, that does not mean we will entertain offers that grossly undervalue the company, and leave our shareholders and other stakeholders exposed to serious risk.
“After thorough consideration, Mylan’s Board unanimously determined that Teva’s proposal grossly undervalues Mylan, and would require Mylan’s shareholders to accept what we believe are low-quality Teva shares in exchange for their high-quality Mylan shares in a transaction that lacks industrial logic and carries significant global antitrust risk. In addition, we also believe that the proposal does not address the serious challenges of integrating two fundamentally different and conflicting cultures under a Teva Board and leadership team with a poor record of delivering sustainable shareholder value. We believe that these challenges would make it very difficult to generate value from this combination for Mylan shareholders.
“Furthermore, the proposal contains nothing meaningful indicating why a combination with Teva would be in the best interest of Mylan’s employees, patients, customers, communities and other stakeholders. In summary, the Board determined that Teva’s expression of interest is not in the best interests of Mylan, its shareholders or other stakeholders, and we believe that this is only a mere attempt by Teva to frustrate and distract Mylan from its business plan and strategy.”