SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. __)
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Filed by a Party other than the Registrant [x]
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[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[X ] Soliciting Material Pursuant to ss. 240.14a-12
Mylan Laboratories Inc.
(Name of Registrant as Specified In Its Charter)
Carl C. Icahn,
Barberry Corp., Hopper Investments LLC and
High River Limited Partnership
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
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On November 22, 2004, High River Limited Partnership delivered a letter to
Mylan Laboratories, Inc. ("Mylan"), which letter is attached hereto.
SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT AND OTHER
DOCUMENTS RELATED TO SOLICITATION OF PROXIES BY MR. ICAHN AND HIS AFFILIATES
FROM THE STOCKHOLDERS OF MYLAN LABORATORIES INC. FOR USE AT ITS SPECIAL MEETING
WHEN AND IF THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. WHEN COMPLETED, A DEFINITIVE PROXY STATEMENT AND A FORM OF PROXY
WILL BE MAILED TO STOCKHOLDERS OF MYLAN LABORATORIES INC. AND WILL BE AVAILABLE
AT NO CHARGE AT THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE PARTICIPANTS IN A PROXY
SOLICITATION IS CONTAINED IN THE SCHEDULE 14A FILED BY MR. ICAHN AND HIS
AFFILIATES WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 2004 WITH
RESPECT TO MYLAN LABORATORIES INC. THAT SCHEDULE 14A IS CURRENTLY AVAILABLE AT
NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE.
High River Limited Partnership
767 Fifth Avenue - 47th Floor
New York, New York 10153
November 22, 2004
Board of Directors
Mylan Laboratories, Inc.
1500 Corporate Drive - Suite 400
Canonsburg, Pennsylvania 15317-8574
Re: Mylan Laboratories, Inc. ("Mylan")
Ladies and Gentlemen:
We were astonished to see that within 3 hours after receiving our letter on
November 19, 2005, Mylan cavalierly dismissed our $20 per share acquisition
proposal as a "tactic" and that less than 3 days after receiving our letter,
without even so much as placing a phone call to us to discuss our proposal,
Mylan has taken the position that ours is not a serious offer and that
discussions between our companies are not in the best interest of Mylan.
We do not, have not and will not make frivolous bids. We advise you that we
anticipate contributing, together with our affiliates, at least $1.5 billion of
equity to the acquisition of Mylan and are prepared to provide detail regarding
our financial condition at your request. (1) We are in discussion with a major
financial institution regarding additional funding and based upon those
conversations we are confident that once due diligence is provided we would be
able to submit to the Board a fully funded transaction. Perhaps if the Board,
which has stated that it is in the best position to determine the long-term
plans for Mylan, had bothered to speak to us rather than rushing out a press
release, it could have been better informed before racing to conclusions.
We think the real test of long-term commitment to a company is reflected by
the number of shares purchased with your own money. In our September meetings
with Mr. Coury he recounted to us that he was a wealthy man, however, he has
reported purchasing less that 2,000 Mylan shares. Yes, the company has given him
plenty of stock, but how much of his money has he invested in Mylan? How much
have all of the Board members other than Mr. Puskar invested in Mylan?
It is interesting that you have gone back three to five years to support
the results obtained by Mylan, which you describe as significantly outperforming
"most" industry peers. We have received a study by A.T. Kearney that indicates
that for fiscal years 2002-2004, (years 2003 and 2004 being the "Coury years"),
Mylan's revenue and EBITDA grew at a compounded annual
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1 Our Mylan position existed prior to our recent establishment of
a hedge fund and therefore that fund would not participate in this transaction.
growth rate of 11.6 percent and 10.7 percent, respectively, compared to 21
and 28 percent for its largest competitors.
Given that performance, we would have expected Mr. Coury's compensation to
suffer. However, paradoxical to what we think would be congruous compensation
for Mylan performance, in the 2003 fiscal year, Mylan paid Mr. Coury over $2.4
million in cash and stock options which Mylan reported as having a potential
realizable value of between $12.7 and $32.7 million. In the face of lagging
Mylan performance in the 2004 fiscal year, Mr. Coury was paid over $3 million in
cash and received restricted stock which Mylan reported at a value of
$6,150,375. We find this to be offensive and, given the fact that Mylan's
generic segment revenue decreased by approximately 18 percent for the quarter
ending September 30, 2004 over the results for September 30, 2003, it appears to
us that the Board's apparent enthusiasm for existing management is misplaced.
Although disappointing, the substantial compensation to Mr. Coury is not
surprising, in light of the criticism to which Mylan has been subjected
regarding corporate governance. As reported in the interactive edition of the
Pittsburgh Post-Gazette on November 2, 2004:
GovernanceMetrics International, a New York firm that evaluates
companies on corporate governance issues, ranks Mylan 2.5 on a scale of 1
to 10, with 10 being the best. It faulted the drug maker for compensation
practices, lack of independent directors, and business deals between the
company and officers, directors or their relatives, said Gavin Anderson,
GovernanceMetrics chief executive officer.
Anderson cited the $2 million bonus Coury received in the fiscal
year ended March 31, $1.1 million of which was guaranteed. His firm
considers seven of Mylan's 11 directors non-independent. Five are current
or former officers.
In the face of mounting criticism, more companies are putting more
outsiders on their boards, believing shareholder interests are better
served if more directors have fewer ties with management. Charles Elson,
chairman of the University of Delaware's Weinberg Center for Corporate
Governance said independent directors control 75 percent or more of the
board seats at most companies.
Mylan has "an exceedingly high percentage of insiders or
quasi-insiders compared to what's going on inside corporate America today,"
said Donald Hambrick, a management professor at Penn State's Smeal College
of Business. "I can see why Icahn is trying to do what he is."
If your high-speed rejection of our proposal is indicative of what you have
today referred to as the Board's "considered and careful judgments when making
any decisions" then perhaps we should not be surprised either by the matters
referred to in the above article or by the state of affairs in which Mylan
currently finds itself.
Very truly yours,
High River Limited Partnership
By: Hopper Investments LLC,
its general partner
By: Barberry Corp., sole member
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Chairman of the Board