NEW YORK (AP) - Generic drugmaker Mylan raised its offer for over-the-counter medicines maker Perrigo Wednesday, but the Irish company again rejected Mylan's overture.
NEW YORK (AP) — Generic drugmaker Mylan raised its offer for over-the-counter medicines maker Perrigo Wednesday, but the Irish company again rejected Mylan's overture.
Mylan said Wednesday it will pay $232.23 for each share of Perrigo in a mix of cash and stock, valuing Perrigo at about $34.1 billion. Perrigo says the offer isn't in its best interest and that it isn't worth as much as Mylan says.
Perrigo rejected an offer from Mylan last week, and Mylan itself is trying to fend off an acquisition from larger competitor Teva. Mylan wants to combine its prescription generic drug business with Perrigo's business in over-the-counter products like vitamins, nutritional products and infant formula. Teva, already the largest generic drug seller in the world, wants to get even bigger and consolidate its manufacturing and sales by teaming up with Mylan.
Earlier this month Mylan offered to buy Perrigo for $205 per share, or $30.1 billion. Perrigo said that was too low. Mylan is now offering Perrigo shareholders $75 per share in cash instead of $60, as well as slightly more stock.
Teva Pharmaceutical Industries Ltd. of Israel wants to buy Mylan for $82 per share in cash and stock, or $40.1 billion. Mylan said the offer undervalued the company and said it wouldn't start negotiations unless Teva offered at least $100 per share. It also criticized Teva's leadership and corporate culture. Teva wants Mylan to drop its attempt to buy Perrigo.
In the last few months Teva's leadership has said it believes some of the biggest generic drug companies should combine in order to save money and become more efficient. Teva says it could eliminate $2 billion in annual costs after a tie-up with Mylan. An expanded Teva would also have more bargaining power and might be able to boost the price of some of its drugs.
Generic drugs are less expensive than name-brand drugs, but the prices of some generics are increasing because of a lack of competition or shortages brought on by manufacturing problems.
Rumors about an offer Teva began circulating in early March and they have sent Mylan shares higher. Since Mylan wants to buy Perrigo instead of accepting a sale to Teva, Perrigo argues that the gains in Mylan's share price shouldn't be counted as part of the offer. It says Wednesday's offer is worth about $202 per share.
Teva and Mylan would have about $30 billion in annual sales combined, although they would likely have to sell some businesses and products to get approval from antitrust regulators. Mylan says it would have more than $15 billion in annual sales if it buys Perrigo.
Teva said it is committed to buying Mylan and that its proposed deal is more attractive for Mylan's shareholders, a position it has reiterated several times.
Mylan's headquarters are in Canonsburg, Pennsylvania, but the company reincorporated in the Netherlands in March as part of an acquisition that lowered its tax liabilities. Perrigo made a similar move in December 2013, moving its headquarters to Ireland from Allegan, Michigan.
Perrigo shares rose $1.94 to $188.33 in morning trading, and shares of Mylan rose 71 cents to $73.42.
AP Business Writer Joseph Pisani contributed to this report.