Large Hedge Funds carefully monitored the M&A-wave in the Healthcare sector

2015 is shaping up as a record volume of mergers and acquisitions in the pharmaceutical sector, although 2014 also put this record. Bloomberg reported total level of transactions last year to $ 278 billion. Large Hedge Funds carefully monitor these capital flows and use the potential of each buzz.

This year the main Mergers and Acquisitions are in the segment of Drugs-Generic-Industry. February 2015 Pfizer Inc. (PFE -NYSE) buy Hospira Inc. (HSP - NYSE), for $ 15 billion, Valeant Pharmaceuticals International (VRX -NYSE) buy Salix Pharmaceuticals (NASDAQ: SLXP) for $ 10.1 billion. In March AbbVie Inc. (ABBV -NYSE) swallowed Pharmacyclics Inc. (NASDAQ: PCYC) for $ 21 billion. And Actavis (ACT-PA -NYSE) buy Allergan PLC (NYSE: AGN) for $ 66 billion. In June it became clear that Shire PLC (NASDAQ: SHPG) endeavor to swallow Swiss rival Actelion Ltd. (ATLN: VX - SIX SWISS EX) for $ 18.3 billion. At the same time Israel manufacturer of generic drugs (shortly: generics) Teva Pharmaceutical Industries Limited (TEVA-NYSE) redeem in full the business of Allergan PLC (NYSE: AGN) for $ 40.5 billion.

After several unsuccessful attempts to acquire its rival Perrigo Company PLC (NYSE: PRGO; S & P 500), Mylan NV (NASDAQ: MYL; S & P 500) undertook share hostile takeover. The first bid in April was about $ 28.9 billion deflected by management Perrigo, without dialogue. There were several higher, reached $ 34.1 billion - also to no avail. On September 16, Mylan is turned directly to the shareholders of Perrigo extremely attractive offer: $ 75 cash plus 2.3 shares of MYL, against one share of Perrigo. Currently quotes are PRGO = $ 181.08, at 52W Range = $ 141.98 - $ 215.44; and MYL = $ 49.37, at 52W Range = $ 44.80 - $ 76.69. The price is lower because this period MYL shares suffered a drop of nearly 34%, but last month shareholders fully supported management. Actually calculated, Mylan offered above market price ($ 187 for PRGO, at current proposal currently price around $ 179) plus 40 percent ownership of the combined company for the shareholders of Perrigo.

To get full control, Mylan NV needs 50.1% of the capital. Dutch manufacturer of generics has full support from its main shareholder - the US Abbott Laboratories (ABT-NYSE), holder of 14.5% package of shares of Mylan. The acquisition of the desired title is quite possible, because 49% of the capital of Perrigo in the hands of a few hedge funds that bought massive over the past few months, on a rumors of the deal.

Perrigo urges shareholders to reject Mylan takeover offer. CEO, Chairman and President Joseph Papa made an impassioned plea for shareholders to reject Mylan’s $ 27 billion takeover bid during a Thursday webcast to the investment community. “We’re not against a deal. We’re against a bad deal,” Papa said, „They can’t win on growth. What’s this all about? It’s about ego. It’s about the ego of the Mylan executive chairman (Robert Coury).”

Jr.Trader G.Hristov