April 28, 2016 | Health Care | Europe | Ended

Meda / Mylan: VEB, the Dutch Enterprise Chamber, and Deal Collars

With its focus on over-the-counter (OTC) products and a strong presence in emerging markets and Europe, Meda is an ideal strategic partner for Mylan. Although the deal was initially met with scepticism from Mylan shareholders, most have recognised that the 92% premium is less relevant than the actual multiples that Mylan is paying, which are in-line with or lower than precedent specialty pharmaceutical deals. The price is simply what was needed to get Meda’s largest shareholder, the Olssen family (20.7%), to agree to a deal and, even at this level, cash flows are so robust that leverage at the combined company will not be constrained and Mylan can fulfil its aim of returning capital to its shareholders. In this research report, we analyse the key risks to the deal and potential outcomes.

Contents 1. What Makes Meda an Attractive Acquisition Target? 2. Key Risk to the Deal: Dutch Shareholder Activism 3. VEB and European Investors 4. The Enterprise Chamber and the Investigative Procedure 5. Risk of Ambiguity in the Dutch Civil Code 6. Potential Outcomes: Mylan Vote, Further Issues, Bid for Perrigo 7. Relevant Precedent Deal: ABN AMRO’s Sale of LaSalle Bank 8. Financial Valuation Analysis 9. Deal Structure and Timing Expectations 10. Implied Probabilities and Thoughts on the Risk Arbitrage Spread (43 pages)

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