Perrigo rejects raised Mylan bid; Teva recommits to Mylan buy

By Bill Berkrot and Ankur Banerjee

April 29 (Reuters) - Perrigo Co Ltd on Wednesday rejected a sweetened takeover offer from Mylan NV, while Teva Pharmaceutical Industries Ltd said it remains committed to acquiring Mylan, in a high stakes battle of major generic drugmakers.

Mylan's pursuit of Perrigo, which also sells over-the-counter consumer products, is widely seen as an attempt to fend off Teva, the world's biggest maker of generic drugs.

Mylan's latest offer, worth $34.1 billion, comprised $75 in cash and 2.3 of its shares for each Perrigo share, up from a previous $60 in cash and 2.2 shares.

With Mylan raising its bid for Perrigo, it appeared more likely that Teva would increase the size of the cash component of its rejected bid for Mylan, Leerink analyst Jason Gerberry said.

Based on Mylan's Tuesday close, the raised offer valued Perrigo at $242 per share. The previous offer was about $220 per share.

Perrigo said it viewed Mylan's latest offer to be worth $202.20, based on Mylan's March 10 share price of $55.31, before speculation over Teva's interest in Mylan pushed up the stock.

"Today's announcement from Mylan continues to propose a price lower than the previously rejected proposal," Perrigo said.

Mylan summarily rejected Teva's $40 billion offer on Monday, saying it grossly undervalued the company, and made public a scathing letter to Teva management from Executive Chairman Robert Coury, who took several shots at the Israel-based company. Coury said Mylan did not want to be paid with Teva's "high-risk" stock and he raised antitrust issues.

Teva Chief Executive Erez Vigodman responded on Wednesday in a letter to Coury that took exception to the tone of Coury's response and attempted to rebut Mylan's lengthy list of objections to a deal.

Vigodman said Coury painted "a fundamentally distorted picture of Teva" and that stakeholders of the two companies do not "benefit from mudslinging, mischaracterization, rehashing of history or selective presentation of facts."

Teva said its $82-per-share cash and stock offer was now worth $43 billion and was "more attractive" for Mylan shareholders than any alternative. It also said it did not see significant antitrust hurdles, adding that any potential divestitures would be manageable.

"We certainly hope that the Mylan board of directors chooses to engage constructively with us as soon as possible in order to reach agreement on a combination that offers an unparalleled opportunity for value-creation and many other benefits for our respective stockholders, customers, patients and employees. This is a message we are hearing from more and more stockholders of Teva and Mylan," Vigodman concluded in his letter.

Mylan, which is legally based in the Netherlands, said last week it would take its offer for Perrigo directly to shareholders after being rejected.

Dublin-based Perrigo's shares closed down 0.9 percent at $184.74 on the New York Stock Exchange, while Mylan's shares closed up 2.5 percent at $74.50 on the Nasdaq. Teva shares trading in New York closed up 1.3 percent at $62.08. (Reporting by Ankur Banerjee in Bengaluru and Bill Berkrot and Nadia Damouni in New York; Editing by Saumyadeb Chakrabarty, Savio D'Souza and Steve Orlofsky)

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