===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
Amendment No. 2
Schedule TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
Of the Securities Exchange Act of 1934
____________________________
Mylan Laboratories Inc.
(Name of Subject Company (Issuer) and Filing Person (Offeror))
____________________________
Common Stock, par value $0.50 per share
(Titles of Class of Securities)
____________________________
628530107
(CUSIP Number of Class of Securities)
____________________________
Edward J. Borkowski
Chief Financial Officer
Mylan Laboratories Inc.
1500 Corporate Drive
Canonsburg, Pennsylvania 15317
(724) 514-1800
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of the Filing Persons)
____________________________
Copies To:
Roger S. Aaron, Esq.
Eric L. Cochran, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
(212) 735-3000
CALCULATION OF FILING FEE
===============================================================================
Transaction Valuation* Amount of Filing Fee**
-------------------------------------------------------------------------------
$1,000,000,000 $117,700
===============================================================================
* Estimated for purposes of calculating the filing fee only. This
calculation assumes the purchase of at total of 48,780,487 shares of
outstanding common stock of Mylan Laboratories Inc., par value $0.50 per
share, at the maximum tender offer price of $20.50 per share.
** The amount of the filing fee equals $117.70 per million of the transaction
value and is estimated in accordance with Rule 0-11 under the Securities
Exchange Act of 1934, as amended, and Fee Advisory #6 for Fiscal Year 2005
issued by the Securities and Exchange Commission.
/X/ Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $117,700 Filing Party: Mylan Laboratories Inc.
Form or Registration No.: Form S-4, Date Filed: September 3, 2004
File No. 333-118828
/_/ Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/_/ third-party tender offer subject to Rule 14d-1.
/X/ issuer tender offer subject to Rule 13e-4.
/_/ going-private transaction subject to Rule 13e-3.
/_/ amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: /_/
===============================================================================
This Amendment No. 2 amends and supplements the Tender Offer
Statement on Schedule TO ("Schedule TO") filed with the Securities and Exchange
Commission (the "Commission") on June 16, 2005 and Amendment No. 1 to Schedule
TO filed with the Commission on June 17, 2005 by Mylan Laboratories Inc., a
Pennsylvania corporation ("Mylan" or the "Company"), pursuant to Rule 13e-4
under the Securities Exchange Act of 1934, as amended, in connection with
Mylan's offer to purchase for cash up to 48,780,487 shares of its common stock,
par value $0.50 per share, including the associated preferred stock purchase
rights (the "Common Stock"), or such lesser number of shares of Common Stock as
are properly tendered and not properly withdrawn (the "Shares"), at a price not
greater than $20.50 nor less than $18.00 per Share, net to the seller in cash,
without interest. Mylan's offer is being made upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated June 16, 2005 ("Offer to
Purchase"), and in the related Letter of Transmittal ("Letter of Transmittal")
which, as amended or supplemented from time to time, together constitute the
Offer.
All information in the Offer to Purchase and in the related
Letter of Transmittal is hereby expressly incorporated in this Amendment No. 2
to Schedule TO by reference in response to all of the applicable items in
Schedule TO, except that such information is hereby amended and supplemented to
the extent specifically provided herein.
ITEMS 1 through 11
1. As disclosed in the Offer to Purchase, Mylan obtained a commitment letter
from Merrill Lynch Capital Corporation and Merrill Lynch, Pierce, Fenner &
Smith Incorporated, pursuant to which Merrill Lynch Capital committed to
provide Mylan with a $975 million credit facility. Mylan is continuing to
arrange financing in connection with the Offer. One of the conditions to the
Company's obligation to purchase its common stock in the Offer is that Mylan
has obtained or is able to obtain, prior to the expiration date of the Offer,
financing (a) pursuant to the terms and conditions of such commitment letter
and (b) on terms reasonably satisfactory to the Company, which, with existing
cash reserves, will be sufficient to consummate the Offer. The Company today is
waiving the portion of such condition that requires the financing to be on
terms reasonably satisfactory to the Company. Therefore, to give effect to the
waiver, this condition is restated as follows:
"Notwithstanding any other provision of the Offer, Mylan will not be
required to accept for payment, purchase or pay for any Shares
tendered, and may terminate or amend the Offer or may postpone the
acceptance for payment of, or the purchase of and the payment for
Shares tendered, subject to the rules under the Exchange Act, if at
any time on or after the commencement of the Offer and before the
Expiration Date any of the following events have occurred (or have
been determined by Mylan to have occurred) that, in the Company's
reasonable judgment and regardless of the circumstances giving rise to
the event or events (other than any action or omission to act by
Mylan), makes it inadvisable to proceed with the Offer or with
acceptance for payment:
o Mylan is or will be unable prior to the Expiration
Date to obtain financing pursuant to the terms and
conditions contained in the Commitment Letter
described in Section 9, which, with existing cash
reserves, will be sufficient to purchase the Shares
pursuant to the Offer and pay related fees and
expenses."
Other conditions of the Offer remain unchanged.
2. The Offer, which was originally due to expire at 5:00 p.m., New York City
time, on Friday, July 15, 2005, has been extended seven hours. Accordingly, the
Offer will now expire at 12:00 midnight, New York City time, on Friday, July
15, 2005, unless Mylan further extends the Offer.
3. On July 6, 2005 Mylan issued a press release announcing the resignations of
Patricia A. Sunseri and Stuart A. Williams as directors effective July 6, 2005
and the decision of Mylan's Board of Directors to reduce its size from eleven
to nine directors, effective upon the resignations of Ms. Sunseri and Mr.
Williams as directors. A copy of the press release is filed as Exhibit
(a)(5)(C) to this Schedule TO and incorporated herein by reference.
4. On July 11, 2005 Mylan issued a press release announcing its preliminary
financial results for the first quarter fiscal 2006, a reaffirmation of its
fiscal 2006 and fiscal 2007 guidance previously announced on June 14, 2005 and
the extension of the Offer as described in paragraph 2 above. A copy of the
press release is filed as Exhibit (a)(5)(D) to this Schedule TO and
incorporated herein by reference.
5. Since the filing of the Offer to Purchase, Mylan has engaged in the process
of arranging the financing for the Offer. Based on such process, Mylan
currently believes that the average weighted interest rate for the financing
will be 6.3%, instead of the rate of 6.6% disclosed in the Offer to Purchase.
Accordingly, to give effect to such lower average weighted interest rate used
to compute pro forma interest expense, this Amendment No. 2 amends and restates
the subsection titled "Summary Unaudited Pro Forma Consolidated Financial Data"
of Section 10 ("Certain Financial Information") of the Offer to Purchase as
follows:
"Summary Unaudited Pro Forma Consolidated Financial Data. The
following table sets forth summary unaudited pro forma consolidated
financial data for the fiscal year ended March 31, 2005, a pro forma
earnings to fixed charges ratio for the fiscal year ended March 31,
2005 and our pro forma financial position at March 31, 2005. This
summary unaudited pro forma consolidated financial data gives effect
to the purchase of Shares pursuant to the Offer as if such purchase
had occurred at the dates indicated. This information should be read
in conjunction with Summary Historical Consolidated Financial Data and
our audited consolidated financial statements and the related notes
filed as part of our Annual Report on Form 10-K for the fiscal year
ended March 31, 2005. This summary unaudited pro forma consolidated
financial data is not necessarily indicative of either our financial
position or results of operations, which actually would have been
attained, had the purchase of Shares pursuant to the Offer and the
related financing been completed at the dates indicated, or, will be
achieved in the future. This summary unaudited pro forma consolidated
financial data has been included herein for informational and
comparative purposes only. We have included the summary unaudited pro
forma consolidated financial data solely for the purpose of providing
shareholders with information that may be useful for purposes of
considering and evaluating the Offer. Our future results are subject
to prevailing economic and industry specific conditions and financial,
business and other known and unknown risks and uncertainties, certain
of which are beyond our control. These factors include, without
limitation, those described in this Offer under "Forward-Looking
Statements.
The pro forma amounts have been calculated assuming that we
complete the Offer for 48,780,487 Shares at a price of $20.50 per
Share. The amounts exclude the effects of the planned open market (or
otherwise) follow-on share repurchase program. The unaudited pro forma
consolidated financial data also assumes that the Offer, including
transaction costs, is financed through the net proceeds of $775
million in debt financing pursuant to the terms and conditions
contained in the Commitment Letter and the use of approximately $250
million in existing cash reserves.
Year Ended
March 31, 2005
-------------------------------------
Historical Pro Forma (a)
--------------- -------------------
(in thousands, except per share data)
Income Statement Data:
Total revenues $ 1,253,374 $ 1,253,374
Gross profit $ 623,540 $ 623,540
Interest expense (b) $ -- $ 52,773
Net earnings $ 203,592 169,290
Earnings per common share
Basic $ 0.76 0.77
Diluted $ 0.74 0.75
Weighted average common shares
outstanding
Basic 268,985 220,205
Diluted 273,621 224,841
Other Data:
Ratio of earnings to fixed charges N/A 6.0x
At March 31, 2005
-------------------------------------
Historical Pro Forma (c)
--------------- -------------------
(in thousands, except per share data)
Balance Sheet Data
Current assets(d) $ 1,528,452 $ 1,282,336
Non-current assets(d) $ 607,221 $ 622,337
Current liabilities, excluding
current portion of long-term
debt $ 245,507 $ 245,507
Non-current liabilities,
excluding long-term debt $ 44,230 $ 44,230
Long-term debt, including amounts
due within one year $ -- $ 775,000
Total shareholders' equity(d) $ 1,845,936 $ 839,936
Book value per share $ 6.85 $ 3.81
(a) Pro forma income statement and other data is presented giving
effect to the Offer as of April 1, 2004.
(b) Pro forma interest expense has been computed under the
assumption that $275 million of borrowings under the term loan
facility and $500 million of notes will be used to finance the
Offer. A weighted average interest rate of 6.3% has been used
to compute pro forma interest expense. Additionally, included
in pro forma interest expense is a commitment fee of 0.50% on
the undrawn portion of the $200 million revolving credit
facility, and amortization of debt issuance costs in the amount
of approximately $3 million. No borrowings are assumed under
this revolving credit facility.
In addition, the calculation of pro forma interest expense
assumes a pay down of a portion of the borrowings under the
term loan facility as outlined in the Commitment Letter, as
well as lower interest income as a result of the use of
existing cash used to finance a portion of the transaction.
If the actual interest rates vary from the rates that have been
assumed, a 25 basis points variance causes an approximate $1.9
million change to annual interest expense.
(c) Pro forma balance sheet data is presented giving effect to the
Offer as of March 31, 2005.
(d) Estimated transactions costs of $21.1 million are included in
the pro forma balance sheet data. Of this amount, $15.1 million
of debt issuance costs are included in other non-current assets
and $6.0 million is included as a cost of the repurchase."
ITEM 12. Exhibits
Item 12 of the Schedule TO is hereby amended by adding the following exhibits:
(a)(5)(C) Press release issued by Mylan on July 6, 2005.
(a)(5)(D) Press release issued by Mylan on July 11, 2005.
SIGNATURE
After due inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
MYLAN LABORATORIES INC.
By: /s/EDWARD J. BORKOWSKI
_____________________________
Name: Edward J. Borkowski
Title: Chief Financial Officer
Date: July 11, 2005
INDEX TO EXHIBITS
Exhibit
Number Document
------- --------
(a)(1)(A) Offer to Purchase dated June 16, 2005.***
(a)(1)(B) Letter of Transmittal (including Guidelines of the
Internal Revenue Service for Certification of Taxpayer
Identification Number on
Substitute Form W-9).**
(a)(1)(C) Notice of Guaranteed Delivery.**
(a)(1)(D) Letter to Shareholders, dated June 16, 2005.***
(a)(1)(E) Letter to Brokers, Dealers, Banks, Trust Companies
and Other Nominees.***
(a)(1)(F) Letter to Clients for use by Brokers, Dealers,
Banks, Trust Companies and Other Nominees.**
(a)(1)(G) Letter from Mylan Laboratories Inc. to Participants in
its Profit Sharing 401(k) Plan.**
(a)(5)(A) Form of Summary Advertisement.***
(a)(5)(B) Press Release issued by the registrant on June 16,
2005.***
(a)(5)(C) Press Release issued by the registrant on July 6, 2005.*
(a)(5)(D) Press Release issued by the registrant on July 11,
2005.*
(b) Commitment Letter from Merrill Lynch Capital Corporation
and Merrill Lynch, Pierce, Fenner & Smith Incorporated,
dated as of June 13, 2005.***
(d)(1) Rights Agreement dated as of August 22, 1996, between
the registrant and American Stock Transfer & Trust Co.,
filed as Exhibit 4.1 to Form 8-K filed with the SEC on
September 3, 1996, and incorporated herein by
reference.
(d)(2) Amendment to Rights Agreement dated as of November 8,
1999, between the registrant and American Stock
Transfer & Trust Co., filed as Exhibit 1 to Form 8-A/A,
filed with the SEC on March 31, 2000.
(d)(3) Amendment No. 2 to Rights Agreement dated as of August
13, 2004, between the registrant and American Stock
Transfer & Trust Company, filed as Exhibit 4.1 to the
Report on Form 8-K filed with the SEC on August 16,
2004, and incorporated herein by reference.
(d)(4) Amendment No. 3 to Rights Agreement dated as of
September 8, 2004, between the registrant and American
Stock Transfer & Trust Company, filed as Exhibit 4.1
to the Report on Form 8-K filed with the SEC on
September 9, 2004, and incorporated herein by reference.
(d)(5) Amendment No. 4 to Rights Agreement dated as of
December 2, 2004, between the registrant and American
Stock Transfer &Trust Company, filed as Exhibit 4.1
to the Report on Form 8-K filed with the SEC on December
3, 2004, and incorporated herein by reference.
(d)(6) Mylan Laboratories Inc. 1986 Incentive Stock Option
Plan, as amended to date, filed as Exhibit 10(b) to
Form 10-K for the fiscal year ended March 31, 1993, and
incorporated herein by reference.
(d)(7) Mylan Laboratories Inc. 1997 Incentive Stock Option
Plan, as amended to date, filed as Exhibit 10.3 to Form
10-Q for the quarter ended September 30, 2002, and
incorporated herein by reference.
(d)(8) Mylan Laboratories Inc. 1992 Nonemployee Director Stock
Option Plan, as amended to date, filed as Exhibit 10(l)
to Form 10-K for the fiscal year ended March 31, 1998,
and incorporated herein by reference.
(d)(9) Mylan Laboratories Inc. 2003 Long-Term Incentive Plan,
filed as Appendix A to Definitive Proxy Statement on
Schedule 14A, filed with the SEC on June 23, 2003, and
incorporated herein by reference.
(d)(10) Executive Employment Agreement dated July 22, 2002,
between the registrant and Robert J. Coury, filed as
Exhibit 10.1 to Form 10-Q for the quarter ended June
30, 2002, and incorporated herein by reference.
(d)(11) Amendment No. 1 to Executive Employment Agreement dated
as of December 15, 2003, between the registrant and
Robert J. Coury, filed as Exhibit 10.15(a) to Form 10-Q
for the quarter ended December 31, 2003, and
incorporated herein by reference.
(d)(12) Executive Employment Agreement dated as of July 1,
2004, between the registrant and Edward J. Borkowski,
filed as Exhibit 10.27 to Form 10-Q/A for the quarter
ended September 30, 2004 and incorporated herein
by reference.
(d)(13) Executive Employment Agreement dated as of July 1, 2004,
between the registrant and Louis J. DeBone, filed as
Exhibit 10.28 to Form 10-Q/A for the quarter ended
September 30, 2004 and incorporated herein by reference.
(d)(14) Executive Employment Agreement dated as of July 1, 2004,
between the registrant and John P. O'Donnell, filed as
Exhibit 10.29 to Form 8-K, filed with the SEC on
December 3, 2004 and incorporated herein by reference.
(d)(15) Executive Employment Agreement dated as of July 1, 2004,
between the registrant and Stuart A. Williams, filed as
Exhibit 10.30 to Form 10-Q/A for the quarter ended
September 30, 2004, and incorporated herein by
reference.
(d)(16) Form of Employment Agreement dated as of December 15,
2003, between the registrant and certain executive
officers (other than named executive officers), filed
as Exhibit 10.18 to Form 10 Q for the quarter ended
December 31, 2003, and incorporated herein by reference.
(d)(17) Penederm Incorporated Employee Stock Option Plan
incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-8, filed with the
Commission on October 5, 1998, File No. 333-65329.
(d)(18) Penederm Incorporated 1994 Nonemployee Directors Stock
Option Plan incorporated by reference to Exhibit 4.1 to
the Registration Statement on Form S-8, filed with the
Commission on October 5, 1998, File No. 333-65327.
(g) Not applicable.
(h) Not applicable.
_________________
* Filed herewith.
** Previously filed on Amendment No. 1 to Schedule TO on June 17,
2005.
*** Previously filed on Schedule TO on June 16, 2005.