NEW YORK/STOCKHOLM (Reuters) - U.S. generic drugmaker Mylan (MYL.O) has made a new and improved bid for Meda MEDAa.ST valuing its Swedish rival at around $9 billion including debt, a person familiar with the matter said on Friday.
Mylan raised its all-stock offer to 145 crowns per share this week after its first attempt at a merger with a 130 per share offer was rejected by Meda earlier this month, the person said, asking not to be named because the matter is not public.
Excluding debt, the new bid is worth about $6.7 billion based on shares outstanding and represents a roughly 50 percent premium over Meda’s share price before reports of the original offer.
Trading in Meda shares was halted in Stockholm earlier on Friday after the Financial Times first reported Mylan hiked its takeover offer, triggering a 10 percent jump in the stock.
A Meda spokesperson declined to comment on the report. Mylan was not immediately available for comment.
The sweetened offer comes amid a flurry of healthcare deals this week including medical device maker Zimmer Holdings Inc’s ZMH.N $13.4 billion acquisition of rival Biomet; a $20 billion asset swap between Novartis AG NOVN.VX and GlaxoSmithKline Pharmaceuticals PLC (GSK.L); and Eli Lilly and Co’s (LLY.N) acquisition of Novartis’ animal health business for $5.4 billion.
The generic drugs sector has seen a wave of mergers recently as companies selling popular copycat versions of blockbuster medicines have been hit by a dwindling number of patent expirations and are looking to cut costs.
Meda rebuffed Mylan’s initial takeover approach in early April, saying it had been contacted about an indicative proposal to combine the two businesses but that its board had opted to reject the proposal.
An acquisition of Meda would boost Mylan’s presence outside the United States with access to distribution channels in Europe and some emerging markets. It would also boost Mylan’s position in specialty pharmaceuticals where it focuses on respiratory and allergy medicines, which is a key area for Meda as well.
Among potential buyers, Mylan was well placed to make a move, bankers and analysts have said. It could also take advantage of lower corporate tax rates as the purchase would increase the percentage of revenues coming from overseas, allowing it to move its tax domicile outside the United States.
Meda’s biggest owner is Stena Sessan Rederi AB, controlled by the Olsson business family, which owns 22.7 percent of shares, meaning it could block any takeover attempt.
Reporting by Soyoung Kim in New York, Niklas Pollard and Alistair Scrutton; Editing by Alex Smith, Mark Potter, Jane Merriman and Nick Zieminski