Mylan continues pursuit of Perrigo, hiking its offer price, but to no avail

In what is turning out to be one of the most high-profile takeover battles in the pharma sector this year, Netherlands-incorporated generics drugmaker Mylan (Nasdaq: MYL) has for a second time raised its offer price for smaller Ireland-based rival Perrigo (NYSE: PRGO), following the latter’s rejection.

Perrigo shares rose 1.9% to $190 at 9:36 am in New York, and Mylan climbed less than 1% to $73.10, while Israel’s Teva Pharmaceutical Industries (NYSE: TEVA), which is part of a three-way-tug of war with a $40.1 billion offer for Mylan that has been rejected, was little changed.

Under the terms of the increased offer, Perrigo shareholders will receive $75 in cash and 2.3 Mylan ordinary shares for each Perrigo ordinary share. Based on Mylan's closing stock price of $68.36 on April 8, 2015, the first day of market reaction to the initial proposal, the value of today's offer is $232.23 per Perrigo share, which represents a multiple of around 25x calendar year 2014 earnings before interest, taxes, depreciation and amortization (EBITDA; pro forma for Perrigo's recent acquisition of Omega Pharma).