NEW YORK (AP) — Over-the-counter medicines maker Perrigo said Tuesday it is turning down a buyout offer from generic drugmaker Mylan that valued the company at $205 per share, or almost $29 billion, because it's too low.
The move is the latest in a wave of merger activity in the health care sector. Earlier Tuesday, Teva Pharmaceutical Industries Ltd., the world's largest generic drug company, offered to buy Mylan for $82 per share, or $40.1 billion.
Perrigo said that Mylan's offer undervalues its business, including its product pipeline and its recent purchase of Belgium's Omega Pharma, one of the largest over-the-counter drug companies in Europe. Mylan offered to buy Perrigo for $28.86 billion in cash and stock.
Representatives for Mylan weren't immediately available to comment on Perrigo's rejection of its bid.
Perrigo's products include over-the-counter diabetes products, infant formula, vitamins, dermatology products, men's and women's health products and animal health items. It had about $4 billion in sales in its last fiscal year.
Mylan went public with its offer for Perrigo April 8, saying that if the companies joined forces, they would have more than $15 billion in annual sales of generic and nonprescription drugs and nutritional products.
Mylan NV is based in the Netherlands and Perrigo Co. is headquartered in Ireland. Both companies recently moved to Europe from the U.S. in transactions that reduced their tax obligations.
Teva's offer for Mylan is contingent on Mylan not buying Perrigo. Mylan didn't comment on Teva's offer Tuesday, but it said Friday that it doubted regulators would approve the deal. It did say it would review an offer if Teva made one.
While Mylan wants to combine its generic drug business with Perrigo's over-the-counter product business, Teva thinks some of the leading generic drug companies should consolidate their operations to save money in areas like research and development and manufacturing.
Perrigo shares fell 2.7 percent to $192.82 Tuesday. The stock is up 17 percent since April 7. Mylan's offer came at a premium of 24 percent to Perrigo's closing price on that date.
Perrigo also reported its fiscal third-quarter results Tuesday. It posted a larger-than-expected profit if one-time items are excluded. Its shares rose 1.1 percent to $195 in aftermarket trading.