Mylan-targeted Perrigo held merger talks with Endo - sources

By Greg Roumeliotis and Carl O'Donnell

(Reuters) - Perrigo Company Plc, the Irish-based generic drugmaker trying to fend off a hostile bid by Mylan NV, held unsuccessful talks to acquire Endo International Plc in an all-stock deal, according to people familiar with the matter.

The negotiations show how Perrigo has been on the M&A prowl seeking to present its shareholders with an alternative to a deal with Mylan, as well as its willingness to walk away if it cannot reach terms that it considers to be attractive.

The talks earlier this fall, first reported on by the Wall Street Journal, were advanced enough for major issues such as the role of Endo's chief executive Rajiv De Silva and how the companies could be integrated to have been addressed, the people said on Thursday.

But Perrigo ended the talks when Endo asked for too much stock for its shareholders, representing a larger premium than what Perrigo was willing to offer, the people said.

Perrigo concluded that it would generate better returns by sticking with its disciplined approach to M&A, which it believes has generated a lot of value over the years, the people added.

Perrigo also considered other smaller acquisitions, the people said. It will look at several acquisition targets of all sizes if Mylan's tender offer, which ends on Friday, fails, the people added.

The sources asked not to be identified because the deliberations were confidential. Perrigo declined to comment, while Endo did not immediately respond to a request for comment.

Mylan, which first made a bid for Perrigo in April, went hostile in September, offering $75 in cash and 2.3 of its shares for each Perrigo share held. This translates into $176 per share based on Mylan's current share price of $44 per share. Perrigo shares were trading at around $163 in early Thursday afternoon trading in New York.

While the tender offer expires on Friday, Perrigo shareholders who do not tender will have two more weeks to accept Mylan's offer if the minimum acceptance threshold of more than 50 percent of Perrigo ordinary shares is reached.

Perrigo reported a better-than-expected profit for the third quarter last month, and said it would lay off 6 percent of its global workforce and buy back shares worth $2 billion.

(Reporting by Greg Roumeliotis and Carl O'Donnell in New York; Editing by Chris Reese)