Mylan fails in $26 bn bid to buy fellow drugmaker Perrigo

Mylan NV's $26 billion hostile bid for Perrigo Co Plc collapsed on Friday after the Netherlands-based drugmaker failed to secure at least half of Perrigo's outstanding shares in the tender offer.

The failed bid ends nearly seven months of bitter wrangling between the generic drug makers and hands a big victory to Perrigo Chief Executive Joseph Papa.

Mylan shares rose as much as 13.5 per cent to $49.03. Perrigo shares fell as much as 10 per cent to a more than one-year low of $140.40.

Analysts covering both companies welcomed the development.

"We are very pleased with this outcome since we have always argued that Perrigo's standalone prospects are significantly more attractive than what was embedded in the Mylan offer," Jefferies analyst David Steinberg wrote in a note.

Mylan Executive Chairman Robert Coury, who snubbed a takeover offer from Teva Pharmaceutical Industries Ltd to pursue Perrigo, said the company was ready to move on.

"We are well-positioned to quickly execute on the next strategic, value-enhancing opportunities for our business, some of which we have already identified," he said in a statement.

Mylan said just 40 per cent of Perrigo's outstanding shares had been tendered, short of the required 50 per cent. The tender offer expired at 8:00 a.m. ET (1300 GMT) on Friday.

The failed bid allows Mylan to pursue other opportunities and enables its investors to focus on the company's main business, Citi Research analysts wrote in a note.

Perrigo, which said last month that it would lay off 6 per cent of its global workforce and buy back shares worth $2 billion, said it would start its share buyback program immediately.

Mylan made its first public offer for Dublin-based Perrigo in April and pursued a hostile takeover when it was rejected.

Mylan's offer of $75 plus 2.3 Mylan shares was worth about $174.36 per share, based on Mylan's Thursday close.