The Perrigo Company (NYSE:PRGO; TASE:PRGO) shareholders are faced with a decision whether to accept the offer to purchase by Mylan N.V. (Nasdaq: MYL; TASE: MYL), and both sides are making their final efforts to draw more support their way. Mylan is trying to take over Perrigo in a $26.3 billion deal, which Perrigo vigorously opposes. The offer is valid until Friday. Assuming that Mylan's offer is accepted by 50-80% of the shareholders, Perrigo will become its subsidiary, and acceptance by over 80% of Perrigo shareholders will give Mylan full ownership of Perrigo. If less than 50% of Perrigo's shareholders accept the offer, the offer to purchase will have failed.
Sources inform "Globes" that Mylan's current assessment is that acceptance will be around 50%. In order to persuade the investors sitting on the fence, its advisors contacted investment institutions in Israel, which hold 10% of Perrigo's shares, to draw their attention to possible scenarios. If Mylan obtains 50-0% acceptance, under Irish law, to which Mylan is subject, it will have to grant the Perrigo shareholders two more weeks, during which they can choose to accept the offer on the original terms.
Perrigo is playing on this point by telling the shareholders that they do not have to accept the offer now, because they will in any case be able to accept it afterwards if Myan obtains less than 80% support.
Investment institutions put to the test
Mylan is concerned that investors will be persuaded to wait for the additional period, instead of accepting its offer, which could eventually result in Mylan failing to obtain even 50% support.
In its appeal to the Israeli investment institutions, Mylan's advisors are pushing for acceptance of the offer to purchase, stating that if they accept it, and the necessary majority is nevertheless not obtained, if the Perrigo share then falls as a result, the institutions will be able to prove to the investors whose money they manage that they did whatever they could to obtain the profit being offered by Mylan. The institutions were also told that if Mylan's offer is not accepted by enough shareholders, they will have to explain the loss caused by the (possible) fall in the Perrigo share.
Last week, Mylan chairman Robert Coury visited Israel. He met with investors, and expressed commitment to the being traded on the TASE and Perrigo's existing business in Israel. It appears that other Mylan executives, including CEO Heather Bresch, are expected to visit Israel in the coming months if Mylan manages to take over Perrigo.
Published by Globes [online], Israel business news - www.globes-online.com - on November 10, 2015
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