Moody’s Investors Service said that Mylan NV (NASDAQ:MYL)’s offer to buy Perrigo Company Plc would be credit negative for the company. The acquisition may lead to higher leverage and integration risk. The investors service added that provided the sizeable equity component as proposed, the changed capital structure could act as base for an investment grade rating. It would be only possible when the integration risk is manageable with a realistic deleveraging plan. As of now, Perrigo has rejected the bid, and so it would have no impact on Mylan’s developing outlook.
The expert view
Heather Bresch, the CEO of Mylan, said that the deal between Perrigo and the company highlights compelling and clear industrial concept and will lead to considerable value for stakeholders, stockholders, employees, customers and patients, employees through the formation of a strong global healthcare unit that has complementary cultures and businesses and unparalleled scale in its operations. The new unit will showcase broadest and diversified portfolio. It will offer vast reach through extensive distribution channels across the globe.
Mylan expects to get debt financing from Goldman Sachs to support the offer. Robert Coury, the executive Chairman stated that the company made serious commitment to acquire antitrust approvals. Few weeks ago, the company showed an interest to acquire Perrigo for $205 per share. However, that time it was not a formal offer. It came up with an improved and formal offer last week which was rejected by Perrigo. The company termed the offer as not in the interests of its shareholders.
The other bid
Teva Pharmaceutical Industries Ltd (ADR)(NYSE:TEVA) is pressing a purchase of Mylan. However, it mentioned that the offer should be assumed if the Perrigo acquisition deal doesn’t materialize. Last week, it proposed a bid of $82 per share cash to acquire Mylan. It is considered as an underpriced and speculative deal with numerous antitrust hurdles.