Mylan Laboratories announces $1.25 billion share buyback, licensing for blood pressure drug

By Jennifer Chiou

New York, June 14 - Mylan Laboratories announced a $1.25 billion share buyback, comprised of a modified Dutch auction self-tender for up to 48.8 million shares - up to $1 billion - and a $250 million share repurchase program.

The repurchases, representing almost 25% of the company's outstanding shares, will give holders an opportunity to tender their shares at a price between $18.00 and $20.50 per share before 5 p.m. ET on July 15.

If the final purchase price is less than $20.50 per share and more than 48.8 million shares are tendered, the company intends to exercise its right to purchase an additional 2% of its outstanding stock.

Funding for the repurchase will come from $775 million in debt and $500 million of cash.

Merrill Lynch Capital Corp. and Merrill Lynch, Pierce, Fenner & Smith Inc. have given Mylan commitment letters for $975 million of financing including a $200 million revolving credit facility that will be available for general corporate purposes.

Mylan estimates a weighted average interest rate of 6.5% to 7.5%.

Mylan, which is increasing its annual dividend to $0.24 from $0.12 per share effective June 30, also declared plans to out-license nebivolol, an anticipated next-generation beta blocker.

Nebivolol, a hypertension drug, is awaiting final approval from the FDA.

"These strategic announcements demonstrate Mylan's continued commitment to enhancing our leading position in the generic pharmaceutical industry, while optimizing value for our shareholders," Robert J. Coury, vice chairman and chief executive officer, said in a news release.

"We are extremely well positioned to capitalize on multiple new product and other opportunities, and we believe today's announcements will be accretive to our shareholders and position the Company for significantly enhanced potential EPS growth."

Mylan, a pharmaceutical company with headquarters in Canonsburg, Pa., will additionally close its Mylan Bertek subsidiary in a cost-cutting effort.

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