Teva Pharmaceuticals was disappointed after the board of directors of Mylan unanimously rejected its unsolicited takeover proposal. Teva offered to acquire Mylan for $82 per share in cash and stock.

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The stock price of Teva was down by more than 4% to $61.70 per share at the time of this writing around 2:58 in the afternoon in New York.

Teva’s bid grossly undervalues Mylan

According to Mylan’s board, Teva’s approach failed to meet any of the key criteria that would allow them to depart the company’s successful and long-standing standalone strategy, and to consider engaging in a sale discussion.

Robert Coury, Executive Chairman of Mylan, emphasized that Teva’s takeover bid “grossly undervalues” the company. He added that the proposal would require Mylan’s shareholders to accept Teva’s stock, which the board believes to be low-quality in exchange for their high-quality stock.

He added that the proposed transaction lacks industrial logic and carries significant global antitrust risk. Furthermore, Coury said they believe the proposal does not address the serious challenges of integrating two fundamentally different and conflicting cultures under a Teva board and leadership team with a poor record of delivering shareholder value.

“Our Board has a very important fiduciary obligation to protect the best interests of the company’s shareholders and other stakeholders and has always been open to considering all paths forward in that regard, and this situation is no different. However, that does not mean we will entertain offers that grossly undervalue the company, and leave our shareholders and other stakeholders exposed to serious risk, said Coury.

Teva is fully committed to merging with Mylan

In response to the decision of the board of directors of Mylan, Teva President and CEO Erez Vigodman said they were disappointed, but still “fully committed” to complete a merger between the two companies

“We stand ready to complete quickly a transaction that is compelling for both Teva and Mylan stockholders. We are eager to work with Mylan and its advisors to complete a transaction that will allow us to deliver the value inherent in the proposed combination,” said Vigodman.

Teva said its board and management are committed to consummating a deal as soon as possible. The company added that it is ready to meet with Mylan and its advisors immediately. Teva believes that it is beneficial for the shareholders of both companies to start good faith discussions regarding its merger proposal.

Teva stressed that its proposal is extremely attractive for Mylan shareholders citing that reason that it offers substantial premium (48.3%), immediate cash value, and opportunity for a significant upside potential.

Teva estimated that the combined company could achieve substantial synergies of around $2 billion annually.