Market Overview

Analyst Finds Perrigo 'Still Attractive' As Take Out Target

Share:
Related PRGO
The Year-End Tax-Selling Strategy
Perrigo's Weak Near-Term Outlook Is Concerning
Mallinckrodt Post-FTC Settlement: Buy The Dip Or Valeant-Lite? (Seeking Alpha)
Related MYL
The Difference Between Mylan's EpiPen And Generic Offerings
The Market In 5 Minutes: Jobless Claims Lower, Trump Conference Shakes Sectors
Kaleo undeterred by Mylan's trevails over EpiPen pricing; employing same controversial pricing strategy for Auvi-Q (Seeking Alpha)

Despite Perrigo Company plc Ordinary Shares (NYSE: PRGO)'s rejection of a $205 a share offer, the company remains an attractive takeover target, an analyst said Wednesday.

"Either now or in the future, we can't rule out broader strategic interest in Perrigo," said J.P. Morgan's Chris Schott, who maintained an Overweight rating and $215 target.

Perrigo, an Ireland-based generic drug-maker, said Tuesday that Mylan NV (NASDAQ: MYL)'s $29 billion offer undervalues Perrigo, with its recent $4.5 billion acquisition of Omega Pharma.

Perrigo gained 3 percent recently to $198.63.

Schott noted the generic drug sector is "rapidly consolidating" and estimated that Perrigo is worth $180 a share on a "stand-alone basis" -- his $215 price target includes $35 a share to account for "M&A optionality."

Although a higher bid from Mylan would be "unsurprising" according to Schott, Teva Pharmaceutical Industries Ltd.'s (NYSE: TEVA) recent $40 billion bid for Mylan makes that less likely.

Perrigo managers declined comment in a conference call Tuesday on broader strategic interest in their company. "But they did acknowledge some logic behind a merger with a larger organization," Schott concluded.

Latest Ratings for PRGO

DateFirmActionFromTo
Nov 2016Bank of AmericaUpgradesUnderperformNeutral
Aug 2016Deutsche BankMaintainsBuy
Aug 2016JefferiesMaintainsHold

View More Analyst Ratings for PRGO
View the Latest Analyst Ratings

Posted-In: biotech M&AAnalyst Color Biotech Price Target Reiteration M&A Analyst Ratings General

 

Related Articles (MYL + PRGO)

View Comments and Join the Discussion!