Mylan-Perrigo Buyout Offer: What's Next?

• Mylan NV (NASDAQ: MYL) shares have slipped 13 percent this year, while Perrigo Company plc Ordinary Shares (NYSE: PRGO) shares have gained 8 percent.
• In an expected move, Mylan offered a combined cash and stock offer of $186.895 for Perrigo, which included $75 in cash and 2.3 Mylan shares for each Perrigo share.
• Umer Raffat at Evercore ISI said that this latest offer may lead Perrigo to start a "process for sale" or "attempt a large transaction" themselves.

Mylan on Monday officially offered to buy Perrigo for $75 in cash and 2.3 Mylan shares per Perrigo share, an offer of $186.895 per share. Based off Friday's closing price, that represents just a 4 percent premium to the $179.67 closing price. According to Raffat at Evercore ISI, this ups the pressure on Perrigo management. Raffat said that from conversations with investors, Perrigo may either start a process for sale or attempt a large transaction of its own.

Perrigo management had previously told Mylan that their initial bids undervalued the company. Following that, Mylan shareholders approved a vote to pursue a hostile bid for the company in an August shareholder meeting.

The price of the deal has come down substantially from Mylan's initial April $205 per share offer, following a 35 percent decline in Mylan's share price from late April.