ALLEGAN, Mich. -- News that Perrigo avoided a hostile takeover by another company hadn't yet spread in the city of Allegan, Friday morning. However, it was more than welcome at Sophrona's Restaurant.
"This community is dependent on Perrigo for employment. So many of our residents are employed there. I would hate to see it close," resident Pam Hopkins said.
Her husband, Chuck Hopkins said, "I bet I know a hundred people that work there."
"Perrigo's always been a good company. They help a lot of charities in the community," he said.
Joe Papa, CEO of Perrigo, said it's been a tough seven months warding off Mylan -- the pharmaceutical company behind the attempted takeover.
Papa said, "I now have a lot more knowledge of a hostile takeover than I did before and I ever want to again."
Here's what happened:
Starting this past April, Papa said Mylan tried to buyout Perrigo shareholders. Mylan initially made a cash offer to each shareholder for $205 per share. It didn't stick.
So Mylan tried to sweeten the deal by offering Perrigo shareholders a mix of cash and stock in Mylan. ($75 and 2.3 shares per share)
"Which if they got over 50% they would have the ability to [takeover]. I'm delighted to say approximately 61% of the shareholders did not tender and of our longterm shareholders, I'm delighted to say that we believe approximately 80% of our shareholders stuck by Perrigo," Papa explained.
Allegan city manager Robert Hillard said, "The tax impact, as well as the utility impacts that the Perrigo Company provides to the city, are tremendous."
Hillard estimates Perrigo pays 2 or 3 million dollars in property and utility taxes per year to the city alone, and it obviously provides a strong tax base. Several thousands people are employed by the company. It's a tax base the company believes will stay put for the foreseeable future.
"We're very excited," Hillard said.
Perrigo recently moved its headquarters to Ireland which seriously lowers the amount of taxes it pays in the United States. However, it kept its manufacturing base in Allegan.
According to Forbes, moving to Ireland allowed Perrigo to cut their corporate tax rate from 30% in the U.S., down to 12.5%.
Mylan started in West Virginia and moved its headquarters to Pennsylvania, then to the Netherlands.