Which deal gets done: Teva’s rumored Mylan bid or Mylan’s Perrigo offer?

April 20, 2015 | By Carly Helfand

Those Mylan-Teva tie-up rumors just won’t go away, and now, reports say the Israeli drugmaker is weighing a play for its generics rival. But make no mistake, Mylan ($MYL) said Friday: It wants to keep flying solo, and that includes wrapping up some M&A of its own.

Following months of speculation, Petah Tikva-based Teva ($TEVA) is taking a hard look at an offer for Mylan and has approached advisers about a potential bid and financing, Bloomberg reports. According to the news service’s sources, the deliberations may not result in a proposal. After all, there are plenty of obstacles, including overlapping businesses that could thwart regulatory clearance and the tax inversion Mylan just completed.

But just in case, Mylan made its position known. The company is “fully committed to its stand-alone strategy,” Exec Chairman Robert Coury said in a Friday statement. It’s also holding fast to its $29 billion offer for Ireland’s Perrigo ($PRGO)–a bid that a Teva takeover would scuttle.

According to Coury, Mylan has done its homework. In addition to the potential antitrust issues–Teva and Mylan each have a generic version of the other’s lead product in the works–the combination “is without sound industrial logic or cultural fit,” he said.

That stance won’t come as a surprise to the analysts who figured Mylan moved in on Perrigo to fight off outside takeover interest–likely from Teva. The Perrigo offer came just a few days after Mylan adopted a poison pill plan, designed to fend off unwanted suitors.

But if Mylan wants to make that Perrigo dream come true–and keep deal-minded Teva at bay–it may have to pony up more money. Mylan’s bid values Perrigo at 26 times EBITDA, Bloomberg reported earlier this month–and while that’s high, it’s lower than the 30-plus multiple paid by other buyers since M&A fever took the industry by storm.

The way Bernstein analyst Ronny Gal sees it, Johnson & Johnson ($JNJ)–which, like Perrigo, sells to drug stores–or health-products distributor AmerisourceBergen ($ABC) could jump in with competing bids. And don’t forget about the industry’s known deal-scouters: Pfizer ($PFE) and Valeant ($VRX), though currently swallowing other recent buys, could be looking to come back to the table.

http://www.fiercepharma.com/story/which-deal-gets-done-tevas-rumored-mylan-bid-or-mylans-perrigo-offer/2015-04-20

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