Mylan Rejects Teva's Unsolicited $40 Billion Bid--3rd Update

By Tess Stynes 

Mylan NV on Monday said its board unanimously rejected the unsolicited bid from Teva Pharmaceutical Industries Ltd., the latest move in a three-way tussle as the generic-drug industry faces challenges from slowing growth.

Robert J. Coury, Mylan's executive chairman, said Teva's roughly $40 billion offer grossly undervalues the company and "would require Mylan's shareholders to accept what we believe are low-quality Teva shares in exchange for their high-quality Mylan shares." He added that the transaction "lacks industrial logic and carries significant global antitrust risk."

Mr. Coury further stated that the board wouldn't consider engaging in any takeover talks unless the starting point is "significantly in excess of $100 per share."

Mylan also said it remains committed to its offer for Perrigo Co., which some have seen as an effort to prevent a potential purchase by Teva. Mylan on Friday raised its offer to buy Perrigo to about $33 billion and was promptly rebuffed.

At the heart of the deal-making frenzy in the pharmaceutical industry is a quest for new revenue amid pricing pressure from cash-strapped governments and insurers, and increased competition.

In a separate statement, Teva reiterated its commitment to its Mylan offer, valued at $82 a share, and said it was prepared to "devote all necessary resources" to complete the proposed deal. Erez Vigodman, the Israeli drug maker's chief executive, said Teva's board and management are eager to work with Mylan to quickly complete a transaction.

Teva also said its offer would deliver more value to Mylan's stockholders than any other alternative, and it offered reassurances that the proposed deal makes strategic and financial sense and that any regulatory requirements can be met in a timely fashion.

Mylan's Mr. Coury, meanwhile, pointed to Teva's challenges in recent years, including the approval of the first generic version of Copaxone and "persistent turnover and turmoil amongst the Teva leadership and board."

A Teva takeover of Mylan would create the world's top-selling generic-drug company with more than $30 billion in sales in 145 countries. Mylan and Teva are both generic-drug companies with a popular branded product: the EpiPen allergic-reaction treatment in the case of Mylan and the Copaxone multiple-sclerosis drug at Teva.

In afternoon trading Monday, shares of Mylan fell 6% to $71.48 and Teva decreased 4.3% to $61.64. Perrigo shares were down 2.2% to $188.74.

Write to Tess Stynes at [e-mail]

Subscribe to WSJ: http://online.wsj.com?mod=djnwires