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| Perrigo CEO Joseph Papa |
Perrigo's ($PRGO) not opposed to striking a pact with Mylan ($MYL)--as long as the price is right. The bad news for its suitor, though, is that right now, it's nowhere close.
As Perrigo CEO Joseph Papa said at an investor meeting Monday, there's a price at which deal talks could happen, Bloomberg reports. But right now, "we're pretty far apart," he said, as quoted by the news service. "We believe they have substantially undervalued the company."
Perrigo has already said as much in its three rejections of Mylan to date, turning down two sweetened bids in a matter of hours after receiving them. The way the Irish drugmaker sees it, Mylan's shares are inflated, meaning its latest offer--which Mylan lists at $232.23 per share--is actually only worth $202.20 per share. And that's lower than the $205-per-share proposal Perrigo initially nixed.
But while Mylan may still have a ways to go, it's an encouraging sign for the wannabe acquirer, which can thwart a buyout try from Teva ($TEVA) with a Perrigo deal. Teva has said its $40 billion-plus offer for Mylan is contingent on Mylan refraining from other M&A activity, something the drugmaker--which has vehemently refused Teva's advances so far--says it has no intention of doing.
Instead, it's been talking up a Perrigo combo to shareholders, touting the "one-of-a-kind global healthcare company" a deal between the two would create. While Teva and Mylan are generics giants with overlapping businesses--one strike against a potential deal, Mylan management has said--Perrigo generates about half its revenue from OTC products, including store-brand versions of popular meds. And that's something Mylan wants to get in on.
Teva, though, reportedly wasn't so keen on going in that direction. Rumor has it the Israeli company passed up an opportunity to buy Perrigo last summer, most likely because it doesn't operate in the OTC store-brand market, sources recently told local newspaper Globes.
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