Investor Icahn makes $5.4b bid for Mylan

PITTSBURGH -- Shares of Mylan Laboratories Inc. jumped 10 percent yesterday on word that the company's largest shareholder made an offer to buy the generic drug maker.

Investor Carl Icahn has been the most vocal of those who have criticized Mylan's attempt to take over King Pharmaceuticals Inc., a maker of generic and brand name drugs. Icahn offered $20 per share yesterday to take Mylan in a new direction.

With about 2.7 million shares outstanding, Icahn's offer would be worth nearly $5.4 billion, though he already owns 9.8 percent of the company's shares.

Shares of Mylan jumped $1.72, to close at $18.88 on the New York Stock Exchange, a level not seen since the company disclosed the King deal.

"We believe that there are much better alternatives for Mylan than the acquisition of King," Icahn wrote in a filing with the Securities and Exchange Commission. "In fact, in light of the many risks associated with King, we believe that an acquisition of King would be an egregious mistake."

Mylan rejected the offer immediately. Robert Coury, vice chairman and chief executive, issued a statement lambasting Icahn.

"This letter appears to be a standard Icahn tactic, containing factual misrepresentations, and is notable in its lack of detail and commitment," Coury said. "In addition, with regard to Mr. Icahn's threats against members of Mylan's board of directors, we can assure him that his attempts at corporate intimidation will not succeed."

Mylan said it would go forward with its stock bid for King, which was valued at $4 billion in July before Mylan's stock plummeted on the July 26 declaration that it would buy the Bristol, Tenn.-based company.

Mylan stock lost one-quarter of its value in about a week and only began to gain steam again on Aug. 20 when federal regulators said they would allow Icahn to buy $100 million to $500 million worth of company stock.

The deal has been criticized by a number of investors led by Icahn, who has been beefing up his holdings in the company, which is based in the Pittsburgh suburb of Canonsburg.

King, the subject of an SEC investigation concerning pricing practices for government programs such as Medicaid, has been receptive to the merger with Mylan.

King, which had $1.5 billion in 2003 sales, has pushed aggressively into the branded market and has a division devoted to the acquisition of name brands and companies, including Altace, used for hypertension and cardiovascular protection.

That and the company's 1,200-person sales force, which successfully marketed Altace, were the biggest prizes for Mylan, company executives said in July.

With King Pharmaceuticals, Mylan would become a company with combined annual revenues of about $3 billion and a work force of 6,000 people.

In the SEC filing yesterday, Icahn said the deal was especially risky, given that it was under control of the "untested Robert Coury."