Perrigo CEO doesn't believe Mylan's hostile bid will succeed

By Tova Cohen

TEL AVIV (Reuters) - The chief executive of Irish-based generic drugmaker Perrigo Co (PRGO.N) on Tuesday urged shareholders not to accept rival Mylan NV's (MYL.O) $25 billion (16 billion pound) hostile bid for the company.

Netherlands-based Mylan, which first made a bid for Perrigo in April, went hostile in September, and Perrigo shareholders have until Nov. 13 to accept its tender offer.

Under Irish law, Mylan needs to secure 80 percent of shareholders' votes to take control of Perrigo. It says it will run Perrigo as a separate entity if it receives more than 50 percent, but less than 80 percent.

Chief Executive Joseph Papa, speaking to reporters at the Tel Aviv Stock Exchange where Perrigo shares have traded since 2005, said he did not believe Mylan will secure 50 percent of shareholders' votes.

"But if they do get to 50 to 80 percent it would be a very chaotic process," he said. "The chaos that would occur ... is that all of the long-term Perrigo employees would be in a state of uncertainty that what Mylan would probably seek to do is change the board of directors of Perrigo and also the management team."

That uncertainty would last at least six to eight weeks, delaying the time it takes to achieve synergies.

"If shareholders really think about that, it would give them all the more reason not to tender because Mylan to this date has never addressed the situation of negative synergies," he said.

Mylan has offered $75 in cash and 2.3 of its shares for each Perrigo share held. That translates into $171.26 per share as of Mylan's Monday close. Perrigo shares closed at $154.27 on Monday after hitting a year low of $142.67 on Thursday.

Buying Perrigo would give Mylan over-the-counter consumer and nutritional products and generic topical medicines.

Perrigo last week announced plans to lay off 6 percent of its workforce and buy back shares worth $2 billion to boost earnings, as it looks to convince investors to rebuff Mylan's bid.

Papa noted there is a mandatory 14-day extension beyond Nov. 13 if Mylan secures more than 50 but less than 80 percent of Perrigo shares.

"If you are concerned about the chaos that could occur in that 50 to 80 percent you don't need to worry about that," Papa said. "You can then during that 14 days tender your shares, you get the same price. There is no need to tender simply out of fear."

Papa reiterated Perrigo was willing to consider offers from other companies but he believes Mylan's bid was a "bad deal".

He said Mylan would be interested in pursuing more acquisitions once the Mylan tender was done with.

(Editing by Susan Fenton)