Icahn Bids $5.4 Billion for Mylan

Billionaire financier Carl Icahn on Friday offered to buy Mylan Laboratories Inc., the largest U.S. maker of generic medicines, for about $5.38 billion in an attempt to block Mylan’s proposed purchase of King Pharmaceuticals Inc.

Icahn, who held an 8.9% stake in Mylan as of September and is the company’s biggest shareholder, called the $4-billion acquisition of King a mistake because King’s sales are slowing and the company might have to restate earnings.

Icahn’s $20-a-share offer is 17% more than Mylan’s closing share price Thursday.

Mylan has been battling its largest shareholders, including Icahn and UBS Global Asset Management, who say the King purchase is too risky and too expensive.

Icahn began boosting his stake in Mylan within weeks of the King announcement.

He has vowed to block the transaction, saying, “I can’t understand why they would want to do the deal. I think it’s preposterous.”

Mylan has defended its purchase of King, which would give it an experienced sales force to help market an experimental blood pressure medicine the company is developing. King sells the heart drug Altace.

Shares of Canonsburg, Pa.-based Mylan rose $1.72, or 10%, to $18.88 on the New York Stock Exchange. Shares of Bristol, Tenn.-based King fell 5 cents to $11.15.

In a statement, Mylan Chief Executive Robert Coury said Mylan’s position on the King purchase remained unchanged. He said the bid from Icahn’s High River investment group, revealed in a U.S. Securities and Exchange Commission filing, contains “misrepresentations, and is notable in its lack of detail and commitment.”

Icahn, best known for his buyout of Trans World Airlines Inc. in the 1980s, said his group was prepared to negotiate a purchase agreement without a breakup fee, leaving Mylan free to seek other offers.

High River said it has had informal talks with three potential buyers who would be interested in Mylan if the company were willing to negotiate.

Proceeding with the King acquisition without first giving Mylan shareholders a chance to consider the Icahn offer would “constitute a quintessential example of a board abrogating its responsibility,” Icahn’s group said in the filing.