Big shareholder Abbott Laboratories backs Mylan's plan to remain independent, buy Perrigo

Mylan’s largest shareholder has backed the generic drugmaker’s plan to remain a stand-alone company as it fights a takeover bid from larger rival Teva Pharmaceutical.

Abbott Laboratories said Tuesday that Mylan’s strategy and its plan to buy over-the-counter medicines maker Perrigo is compelling and will improve shareholder value. It plans to vote its nearly 15 per cent stake in Mylan in favour of the Perrigo bid, which is valued at around $34 billion but has been rejected by Perrigo.

The news helped Perrigo become the day’s biggest winner on the S&P 500, rising $7.95, or 4.3 per cent, to $191.25. U.S.-traded shares of Mylan N.V. were among the biggest losers on the index, falling $1.54, or 2.1 per cent, to $72.05.

Abbott gained its stake in Mylan N.V. when Mylan bought part of its generic drug business in February.

Teva Pharmaceutical Industries Ltd. has made a $40 billion takeover offer for Mylan but wants that company to drop the Perrigo bid.

Leaders of Teva and Mylan traded barbs recently in letters discussing the bid. Teva has said that Mylan is trying to keep its board and shareholders from considering the offer.

Mylan, in turn, has said Teva is meddling in its affairs and has not made a formal, binding offer.

Both Mylan and Israeli-based Teva Pharmaceutical Industries Ltd. are looking to consolidate in an increasingly competitive generic drug industry.

In connection with the Abbott deal, Mylan reorganized in the Netherlands as part of a tax-reducing move called a corporate inversion.