Generic drugmaker Teva Pharmaceutical is offering $82 a share, or $40 billion, for its smaller rival Mylan, in an alternative to Mylan's deal to buy Perrigo. Bobbi Rebell reports.
Drama among the drugmakers. Teva making a $40 billion hostile bid for smaller rival Mylan. The overture comes as Teva's lucrative multiple sclerosis drug Copaxone faces generic competition. When word of a possible deal began to spread last month, the price represented a 48 percent premium. But, in an attempt to stave off interest from Teva, Mylan recently made a hostile bid for another drug company, Perrigo for $29 billion. A source tells Reuters Perrigo is expected to reject that offer as soon as this week. In the case of Teva buying Mylan, investors are skeptical. Shares of Mylan rose in the news, but have stayed below the $82 a share offer. Reuter's Caroline Humer: SOUNDBITE: CAROLINE HUMER, REUTERS CORRESPONDENT (ENGLISH) SAYING: "The sense is, there is no way they will get Mylan at $82 a share. That is what analysts are saying today. They think that Mylan is going to come out at some point and say thanks, no thanks, and then Teva will come back again with a higher offer. Maybe throw some more cash in there to make it a little bit sweeter and then see what happens." Many analysts believe that number would have to be at least $90 a share. Teva says the combined company would save $2 billion a year, and that it would sell assets if there are regulatory issues. There is also the possibility of another company stepping in to bid for Mylan. SOUNDBITE: TIMOTHY CHIANG, MANAGING DIRECTOR AND SENIOR ANALYST. CRT CAPITAL GROUP (ENGLISH) SAYING: "I think Pfizer. They have already made an acquisition of a generic company called Hospira recently. I sort of speculate that maybe Pfizer might look at Mylan down the road. Again, I think Pfizer has a lot of offshore cash right now, almost $30 billion, and Mylan is now an offshore company so there might be a fit there." A Teva-Mylan deal would be the second-largest healthcare transaction in the last 12 months, following generic drugmaker Actavis $66 billion purchase of Botox maker Allergan.