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[NEW YORK] Teva Pharmaceutical Industries Ltd, whose US$40.1 billion takeover offer for Mylan NV was rejected, is meeting with key shareholders of the target company to win their support, people with knowledge of the matter said.
Some of the meetings have been scheduled for this week in New York, according to one of the people, who asked not to be identified because they're not authorized to speak publicly on the matter. The goal is to convince shareholders that Mylan would be better off in Teva's control, the people said.
The meetings signal that Mylan's strongly-worded rejection of the unsolicited offer may not end the Israeli company's efforts to acquire its generic rival. Mylan Chairman Robert Coury today said Teva's offer "grossly undervalues" his company and would expose it to a "problematic culture" and management with a "poor record."
Teva may consider proceeding with a hostile bid if Mylan's management doesn't engage in negotiations, one of the people said. The Israeli company reiterated its offer of US$82 a share in cash and stock following Mylan's rejection, and said it's "fully committed to completing the combination."
Mylan's board rejected Teva's initial offer because it would require stockholders to accept "low-quality Teva shares," Mr Coury said in the statement on Monday. His company won't consider engaging in discussions unless the bid valued Mylan at "significantly in excess" of US$100-a-share, among other considerations, he said.
Mylan shares dropped 5.5 per cent to US$71.87 as of 3:34 p.m. in New York. A Teva spokeswoman didn't immediately reply to a request for comment on the shareholder meetings.
Mylan's biggest shareholder is Abbott Laboratories, which owns about 14 per cent of the stock after the companies completed a US$5.6 billion, all-stock deal in February that gave Mylan Abbott's drug business in established markets.
Abbott's stake is at Mylan's command, however. The agreement between the two companies says that Abbott can't vote for a proposal that Mylan's board hasn't approved. The restriction is in place until Abbott owns less than 5 per cent of Mylan's shares, according to filings.
Spokesmen for Abbott and Mylan declined to comment.