Institutional Shareholder Services, an influential
shareholder-vote adviser, recommended that Mylan NV investors vote
against authorizing the company's $36 billion takeover of Perrigo
Co., saying the deal faces too many hurdles.
The ISS report, issued Friday to the firm's clients, cited
"unreasonable uncertainties," including that Dublin-based Perrigo's
shareholders may reject the offer. The cash-and-stock bid, which
Perrigo's board has called inadequate, is currently worth just
under $200 a share, down from its raised bid of $232 in April.
That price "could be inadequate to win over enough Perrigo
shareholders to complete the acquisition," ISS wrote.
A Mylan spokesperson didn't immediately comment on the
recommendation.
Mylan stockholders are expected to vote Aug. 28 on whether to
issue new shares to fund the acquisition.
Mylan said this week it was prepared to close a tender offer
after receiving just a simple majority of Perrigo shares, rather
than the 80% required under Irish law to take a company fully
private. ISS said that raised the risk that Mylan would be stuck as
a large shareholder in another public company with no certain path
toward owning the rest.
"The transaction Mylan envisions may indeed be a solid business
strategy. What it has asked shareholders to approve at this
meeting, however, is not a compelling acquisition strategy," ISS
wrote.
Netherlands-based Mylan has been pursuing Perrigo since April.
The chase was complicated when Mylan itself received an unsolicited
offer from Teva Pharmaceutical Industries Ltd., but Teva withdrew
its proposal last month.
Write to Liz Hoffman at liz.hoffman@wsj.com
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