Mylan May Terminate Bid for King

Mylan Laboratories Inc. appeared to back away Wednesday from a contentious $4-billion takeover bid for rival drug maker King Pharmaceuticals Inc.

King said last month it would have to restate earnings for 2002, 2003 and the first six months of 2004, which gave Mylan a way out of a deal that has led one of the company’s largest investors to call for the ouster of Robert Coury, Mylan’s chief executive.

Coury said Mylan continued to monitor King’s financials, but the deal may be dead: “It is highly unlikely that the parties would be able to consummate the merger” before Feb. 28, the date the companies previously set, he said.

Mylan, one of the nation’s largest makers of generic drugs, said in announcing the planned acquisition in July that King would give it a strong presence in the branded drug market. The idea was that King’s sales force of 1,200 would be used to market nebivolol, Mylan’s hypertension drug now under review by the Food and Drug Administration.

The acquisition could still go forward, but Mylan may be seeking a much better price than the $4 billion in stock it offered for Bristol, Tenn.-based King.

“While our continued study may lead to a renegotiating of the existing merger agreement, there can be no assurance that a revised agreement will be reached or that any transaction will occur,” Coury said.

King did not immediately return a call seeking comment.

Since August, Mylan has been trading barbs publicly with billionaire investor Carl Icahn, who began snapping up Mylan stock in a bid to derail the deal. But asset manager Richard Perry has acquired enough shares of Mylan to become its largest shareholder, outstripping Icahn. Shares of Mylan rose 40 cents to $17.57 , while King slid 82 cents to $11.17. Both are traded on the New York Stock Exchange.