BMO Capital presumes that Mylan's (MYL) bid for Perrigo (PRGO) is an unsolicited, or perhaps hostile, one and the firm does not think Mylan has made a compelling case for how it will add value through a merger outside of cost synergies, which could be modest. The firm said it would not be surprised to see the offer met with a "well-reasoned" pushback for higher value and thinks other players that might be more appealing to Perrigo could now step up too. BMO has an Underperform rating on Mylan shares.

Perrigo announced that pharmaceutical company Esteve Healthcare has signed a binding offer to acquire Perrigo's HRA Pharma Rare Diseases business for a total consideration of up to EUR 275M, consisting of an upfront cash payment of EUR 190M and up to EUR 85M in potential earnout payments based on the Rare Diseases business achieving certain sales milestones. Following the information and consultation process with HRA Pharma Works Council in France, Perrigo would be able to exercise the put option granted by Esteve and enter into a definitive agreement with Esteve for the sale of the Rare Diseases business. The proposed final transaction is expected to close during the third quarter of 2024, subject to the satisfaction of the HRA Works Council consultation and customary closing conditions, including receipt of regulatory approvals.