And The Winner From The Mylan-Perrigo Merger Is... Teva?
In a report published Wednesday, Citigroup analyst Liav Abraham commented on a Mylan NV (NASDAQ: MYL) and Perrigo Company plc (NYSE: PRGO) combination, noting that a bid from Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA) is still possible, but challenging.
According to Abraham, if Teva is interested in acquiring Mylan, a bid would need to be made in the near-term. A Teva-Mylan combination would generate "material" earnings per share accretion for Teva and would likely be well received by the Street. However, Teva would need to engage in a hostile bid process for the company – made even more complicated by Mylan's recently implemented poison pill.
Abraham said that Teva's strategy of acquiring smaller branded and generic companies will result in a long-term value creation opportunity and provide greater portfolio diversification and a more attractive longer term growth profile.
Finally, the analyst suggested that a potential Teva combination with Actavis plc (NYSE: ACT)'s generics business is preferred over an outright acquisition of Mylan. In fact, the prospect of a potential Mylan sale could entice Actavis to speed up a divestiture of its generics business which isn't considered to be a core strategic asset.
Shares of Teva remain Buy rated with an unchanged $70 price target.
Latest Ratings for TEVA
|Sep 2016||OTR Global||Initiates Coverage on||Positive|
|Aug 2016||Leerink Swann||Maintains||Outperform|
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