Generic drug-maker Mylan doesn’t appear to be very interested in a $40 billion takeover offer floated by competitor Teva Pharmaceuticals. On Monday, Mylan rejected the offer in a strongly-worded letter that characterized Teva as a ‘low quality’ stock and further stated the proposed deal lacks industrial logic and carries significant antitrust risk.

“Simply put, the Mylan Board has no interest in considering an expression of interest that, based on our evaluation of the factors below, requires Mylan shareholders to accept what we believe is low-quality and high-risk currency in the form of Teva shares in exchange for their higher-quality and lower-risk Mylan shares in a transaction that lacks sound industrial logic and is likely to be significantly value and growth destructive,” Mylan said on Monday.

Teva offered a $82 a share takeover split 50% in cash and 50% in stock. That deal, Teva said, would generate $2 billion in annual synergies. Mylan did say it would be willing to engage with merger talks if Teva was willing to offer a takeover price well in excess of $100 a share, something analysts said on Monday is unlikely.

The rejection the Teva offer comes as Mylan presses its own hostile deal, an about $30 billion takeover of Perrigo, which it said on Friday that it said could eventually drive $800 million in annual operating synergies. However, Perrigo rejected Mylan’s offer on Friday, arguing it undervalued the company.

Citigroup analyst Liav Abraham said in a Monday note a negotiated deal between Mylan and Teve appears unlikely. However, Abraham said Mylan failed to offer a reason why it would receive a superior valuation on a stand-alone basis, thus reinforcing shareholder support for a Teva and Mylan merger. “We believe that Teva could take its offer to acquire Mylan directly to shareholders,” Citigroup said on Monday.

“While we are disappointed that Mylan has formally rejected our proposal, the Teva Board and management team are fully committed to completing the combination of Teva and Mylan, and we stand ready to quickly complete a transaction that is compelling for both Teva and Mylan stockholders,” Teva CEO Erez Vigodman said on Monday.

Mylan shares were falling nearly 5% at $72.45 in Monday afternoon trading. Teva shares were falling over 3%, while Perrigo shares were falling over 1%.

Source: Forbes Health