Global pharmaceutical company Mylan NV (NASDAQ:MYL) chose to reject the unsolicited buyout bid by Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA). The decision was made unanimously by the current Board of Directors.
Teva Undervalued Mylan
The opinionated directors believe that the bid approached by Teva authorities was lackluster, in all regards. The price quoted for Mylan was $40 billion, which seemed unexpectedly low. Moreover, the deal hardly met the key criteria that would lead to a decision to take up the bid and deviate from the current course of action.
Mylan’s board went through the reported bid quite thoroughly. They viewed that Teva highly undervalued Mylan in all respects. The board believed that the deal was not justifiable, and it would not be worth to give the Mylan stakeholders low-pitched Teva shares. In the words of Robert Coury, CEO at Mylan, the decision, if made in favor of Teva, would lack substantial industrial logic and possessed global antitrust risk.
Analysts Say, ‘Buy’ Mylan Shares
The company has obtained ‘Buy’ ratings from quite a few analysts. At Deutsche Bank AG (USA) (NYSE:DB), analysts have quoted Mylan at a target ranging from $65 to $82 per share. Analysts at CRT Capital, BMO Capital Markets, and Argus also quoted ‘Buy’ for MYL stocks. In a consensus, 12 analyst groups have voted for buying MYL stocks, whereas 4 wanted to wait.
Countering Teva’s bid, Mylan bounced back, raising an offer for healthcare supplier company Perrigo Company PLC. The offer is worth $33 billion and is a prompt rebuff of the Teva-bid! A Teva-takeover would lead to a new generic drug company being born, worth $30 billion in the realm of sales across 145 countries worldwide. The rapid rejection was booed by the market, as both Teva and Mylan witnessed decreasing share prices.