Mylan Laboratories plans $975 million credit facility

By Jennifer Chiou

New York, June 14 - Mylan Laboratories Inc. said it has obtained a commitment for $975 million in bank facilities, including a $775 million five-year senior secured term loan and a $200 million five-year revolver, according to an 8-K filing with the Securities and Exchange Commission.

Merrill Lynch Capital Corp. and Merrill Lynch, Pierce, Fenner & Smith Inc. will provide the facilities.

The company will use $775 million of the proceeds to finance part of its $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.

The remaining $500 million needed to buy back the stock will come from cash on hand.

The $200 million revolver will be available for general corporate purposes.

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."

Moody's Investors Service assigned a Ba1 senior implied rating to Mylan on Tuesday while Standard & Poor's gave the company a BBB- corporate credit rating.

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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