Shareholders of the drugmaker Perrigo have shut the door on a $26-billion hostile takeover bid from Mylan.
Mylan said that its cash-and-stock offer failed to garner enough interest from Perrigo shareholders by a Friday morning deadline to complete the deal. The generic drugmaker said about 40 percent of Perrigo shares had been tendered into the offer when it required more than 50 percent as a condition for the deal to go through.
Perrigo shares plunged Friday before markets opened, while Mylan’s stock soared.
Mylan Executive Chairman Robert J. Coury said in a statement from the company that the Perrigo deal was a “unique and exciting opportunity, but not one that was required for the future success of our company.”
Congressman Fred Upton, R-St. Joseph, issued the following statement: “Kudos to the round-the-clock, round-the-world efforts by the Perrigo team. This a relief and much-deserved win for the hard working men and women of the Allegan community. Thankfully shareholders sided with the local community. The stockholders were convinced that the solid management and growth were far better than being bought off in a hostile takeover resulting in more job losses in the United States and Michigan.”
Mylan NV makes more than 1,000 generic drugs and the EpiPen Auto Injector, which is used for the emergency treatment of allergic reactions. The company had made several takeover offers to Perrigo before going around its board and taking a bid directly to shareholders in September.
The drugmaker wanted to combine its business with Perrigo’s over-the-counter portfolio of vitamins, nutritional products and infant formula.
Mylan shareholders voted in favor of the acquisition last month, and European Union regulators have cleared it. Mylan also said recently that it had already received clearance from the U.S. Federal Trade Commission after agreeing to sell seven of its generic drugs.
Mylan had said just three days ago that it was “highly confident” Perrigo shareholders would accept its offer, and it warned them that their stock would suffer if the bid failed.
But Perrigo had called the offer grossly inadequate and urged shareholders to reject the takeover. It said late last month that that it could deliver better value than Mylan through a plan to cut costs and buy back stock. That plan includes cutting 800 employees, or 6 percent of its global workforce.
Perrigo shares sank 10 percent, or $16.37, to $140.25 shortly before markets opened and after Mylan announced results. Mylan shares, meanwhile, rose 10 percent, or $4.30, to $47.50.
Shares of Perrigo started falling early Friday after the Wall Street Journal, citing anonymous sources, said the Mylan bid hadn’t garnered enough stock owner interest by late Thursday night. Mylan shares started climbing in pre-market trading.
Both companies have tied up with foreign companies in recent years to trim their tax bills and organize in Europe using a maneuver called an inversion. Mylan became part of a new company incorporated in the Netherlands but still runs its business out of its Canonsburg, Pennsylvania, near Pittsburgh. Allegan, Michigan-based Perrigo combined with Ireland’s Elan Corp. and now lists its headquarters as Dublin.
The stock of both companies had fallen more than 10 percent since Mylan bypassed Perrigo’s board and took its offer to shareholders.