SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (Amendment No. __)
Filed by the Registrant /_/
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/_/ 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 toss. 240.14a-12
Mylan Laboratories Inc.
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(Name of Registrant as Specified In Its Charter)
Carl C. Icahn,
Barberry Corp., Hopper Investments LLC and
High River Limited Partnership
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On October 29, 2004, High River Limited Partnership delivered a letter
to Mylan Laboratories Inc., which letter is attached hereto as Exhibit 1.
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
October 29, 2004
Robert J. Coury
Board of Directors
Mylan Laboratories, Inc.
1500 Corporate Drive
Suite 400
Canonsburg, Pennsylvania 15317-8574
Re: Mylan Laboratories, Inc. ("Mylan")
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Gentlemen:
As you know, on October 28, 2004 King Pharmaceuticals, Inc. ("King") announced
that their high level of inventory returns and concerns regarding return
reserves, could lead to a restatement of previously issued financial statements
and revisions to preliminary third quarter results. These financial statement
issues, on top of the problems King already faces, reinforce our belief that an
acquisition of King by Mylan is extremely risky and could lead to meaningful
diminution of shareholder value. Mylan may now have a golden opportunity to
sidestep the King transaction and move forward in more advantageous ways. We
believe that it is incumbent on the management of Mylan and the members of its
Board of Directors to seriously consider, in light of their fiduciary duties,
the rights of Mylan under its merger agreement with King concerning its ability
to terminate that agreement, in accordance with its terms.
The latest announcement by King has only added to its existing problems. Mylan
has stated that the acquisition of King's branded pharmaceutical products is a
major reason for the merger with King. Obviously, these branded drugs constitute
the major source of King's profits. Yet almost all of King's patent protected
drugs may face significant generic competition over the next few years as the
result of key patent expiration and/or through challenges to its patents. With
the great uncertainty at King, it is hard to understand buying King at any
price, let alone $4 billion. It is also hard to understand how buying King will
enhance your "vision" of becoming a branded company when almost all of its
branded products are at risk. Indeed Altace(TM), which is responsible for
approximately 38% of King's net branded sales for 2003, is now under significant
threat of losing its patent monopoly in mid-2005. A trial involving a challenge
to Altace(TM) asserted by Cobalt Pharmaceuticals, Inc. ("Cobalt") is expected to
commence in the first quarter of 2005. We have been informed that the principals
of Cobalt have a significant history of success in such cases. Adding to the
difficulty for King, the Federal Trade Commission ("FTC") has commenced numerous
investigations and enforcement actions challenging the validity of settlements
in this context. Any settlement of such suits can raise significant issues,
require notice to the FTC under newly
Robert J. Coury
October 29, 2004
Page 2
adopted law, and would likely be reviewed by the FTC to avoid any settlement
that could delay the entry of other generic manufacturers into the market place,
thus making settlement of such suits much more difficult to achieve. Not only
are existing branded drugs at risk, but King's ability to develop new drugs is
also uncertain. King has historically grown through acquisitions rather than
internal development of new drugs. Considering the highly competitive market for
acquiring new drugs and King's acquisition track record, we strongly question
the ability of King to replace potential losses in sales of its brand name drugs
posed by increased competition. In addition, King engages in limited proprietary
research activity with respect to the development of new products. Finally, King
has disclosed that investigations by the SEC and the Office of Inspector General
of the Department of Health and Human Services, and other possible governmental
investigations and securities and ERISA litigations could have a material
adverse affect on King. We believe this is the background of a company that
Mylan should avoid at any price. We certainly feel that our view of King stock
as a good short has been vindicated by events.
Acquiring King is far from being the best or only alternative to realize your
stated "vision" for the future of Mylan. We have commissioned the consulting
firm of A.T. Kearney to conduct a study that evaluates the generics industry,
Mylan and King. We expect the final report shortly. The team preparing the study
includes participation by five senior members of the A.T. Kearney Pharmaceutical
and Healthcare Practice, a group with combined industry experience exceeding 80
years. The A.T. Kearney report will show that there are many avenues that Mylan
could pursue that make more strategic sense than the transaction with King. We
would be pleased to meet with you to discuss that study and potential strategies
identified by A.T. Kearney that could benefit Mylan.
As you doubtlessly are aware, we are not the only shareholder opposed to the
King transaction. Both UBS Global Asset Management (which reported holdings of
10.5 million shares as of June 30, 2004) and Artisan Partners (which reported
holdings of 4.3 million shares as of June 30, 2004) have written separate
letters to the board to additionally voice their opposition to the merger. Banc
of America Securities has recently reported that in their survey of investors,
76% indicated that if they owned Mylan stock, they would vote AGAINST the
proposed Mylan/King merger; and that was before King's October 28th
announcement.
As stated above, if Mylan can properly terminate the agreement with King, we
believe it should seize that opportunity. Because of the many problems
concerning King, the major uncertainties concerning its future, and the
opposition of your major shareholders, we believe that Mylan should not try to
restructure a new transaction with King on terms that do not require a majority
vote of Mylan shareholders. We believe that such an act would be divisive and
would lead to protracted litigation. Additionally, we would intend to respond to
such action by conducting a proxy contest (which no responsible Board wants for
their company) seeking to run a slate of directors and proposing a new
management team for Mylan.
Robert J. Coury
October 29, 2004
Page 3
Naturally, we would prefer to work with Mylan in a cooperative way, as outlined
above. However, if necessary, we will take such actions as are appropriate to
protect our interests and those of our fellow shareholders.
We look forward to hearing from you.
Very truly yours,
High River Limited Partnership
By: Hopper Investments LLC,
its general partner
By: Barberry Corp., sole member
By: /c/ Carl C. Icahn
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Name: Carl C. Icahn
Title: Chairman of the Board