Teva Can Secure Mylan Deal With Bid Under $100 a Share: Real M&A
2015-04-28 16:33:12.103 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Tara Lachapelle
(Bloomberg) -- Teva Pharmaceutical Industries Ltd. can
afford to pay the price Mylan NV says is required to even start
merger talks. But it won’t need to.
Mylan rejected Teva’s $82-a-share bid Monday, saying it
would take an offer “significantly in excess of $100” before
it would consider engaging in discussions with the generic-drug
giant. If Teva really wanted to, it could make that kind of
offer. Teva’s projection of $2 billion in annual cost savings
means the acquisition is accretive even at prices well above
that amount, according to data compiled by Bloomberg.
But analysts and investors say that large of a bump won’t
be necessary. Teva’s bid already looks appealing in comparison
to Mylan’s current stock price of $73 and change. As Teva meets
with key Mylan shareholders to try to win their support, five
investors polled by Bloomberg News on Monday said a suitable
takeout price would be $85 to $95 a share.
“Because it’s a highly accretive deal, it certainly lends
some room to raise the bid,” Kevin Kedra, an analyst for
Gabelli & Co. in Rye, New York, said in a phone interview. At
the same time, “Mylan shareholders would probably be receptive
to a number that doesn’t need to be $100.”
Other sell-side analysts agree. Canaccord Genuity Group
Inc.’s Corey Davis says Mylan is worth a maximum of $100 a share
to Teva. Cowen Group Inc.’s Ken Cacciatore pegs Mylan’s value at
$88 to $92 a share.
“Teva is already right near that threshold and can easily
cross it,” Cacciatore wrote in a report Monday. He predicts
Teva will sweeten its bid, and then Mylan shareholders will
begin to put pressure on the company to negotiate. Should Mylan
continue to resist, Teva could move to a tender process or
investors could ask for a special vote to overhaul the board, he
said.
For Related News and Information:
Teva Said to Take Acquisition Bid Directly to Mylan Holders
Mylan Investors Want $85-$95/Share in Teva Deal, Survey Says
Real M&A columns: NI REALMNA <GO>
Top deal stories: DTOP <GO>
Merger calculator: MRGC <GO>
--With assistance from Joshua Fineman and Sasha Damouni in New
York.
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman
2015-04-28 16:33:12.103 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Tara Lachapelle
(Bloomberg) -- Teva Pharmaceutical Industries Ltd. can
afford to pay the price Mylan NV says is required to even start
merger talks. But it won’t need to.
Mylan rejected Teva’s $82-a-share bid Monday, saying it
would take an offer “significantly in excess of $100” before
it would consider engaging in discussions with the generic-drug
giant. If Teva really wanted to, it could make that kind of
offer. Teva’s projection of $2 billion in annual cost savings
means the acquisition is accretive even at prices well above
that amount, according to data compiled by Bloomberg.
But analysts and investors say that large of a bump won’t
be necessary. Teva’s bid already looks appealing in comparison
to Mylan’s current stock price of $73 and change. As Teva meets
with key Mylan shareholders to try to win their support, five
investors polled by Bloomberg News on Monday said a suitable
takeout price would be $85 to $95 a share.
“Because it’s a highly accretive deal, it certainly lends
some room to raise the bid,” Kevin Kedra, an analyst for
Gabelli & Co. in Rye, New York, said in a phone interview. At
the same time, “Mylan shareholders would probably be receptive
to a number that doesn’t need to be $100.”
Other sell-side analysts agree. Canaccord Genuity Group
Inc.’s Corey Davis says Mylan is worth a maximum of $100 a share
to Teva. Cowen Group Inc.’s Ken Cacciatore pegs Mylan’s value at
$88 to $92 a share.
“Teva is already right near that threshold and can easily
cross it,” Cacciatore wrote in a report Monday. He predicts
Teva will sweeten its bid, and then Mylan shareholders will
begin to put pressure on the company to negotiate. Should Mylan
continue to resist, Teva could move to a tender process or
investors could ask for a special vote to overhaul the board, he
said.
For Related News and Information:
Teva Said to Take Acquisition Bid Directly to Mylan Holders
Mylan Investors Want $85-$95/Share in Teva Deal, Survey Says
Real M&A columns: NI REALMNA <GO>
Top deal stories: DTOP <GO>
Merger calculator: MRGC <GO>
--With assistance from Joshua Fineman and Sasha Damouni in New
York.
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman