Robert Coury is using real estate analogies to justify the $6.7 billion in cash that Mylan Labs has agreed to pay for Merck KgGA’s generic unit, a price that some on Wall Street call absurd.

“If you want to own beachfront property and all that comes with it, you’re going to simply pay for it,” he tells MarketWatch.

That’s useful imagery, of course. Who wouldn’t like to own a nice view of the ocean? And even in down markets, one can be comforted knowing such property is likely to retain enough appeal to rebound quickly. Unless there’s an unforeseen storm that causes erosion.

That happened to Coury once before, you know. His attempt to buy King Pharmaceuticals ended in disaster over the proposed price tag. Carl Icahn scuttled that one. “In our view, watching Mr. Coury at Mylan has been analogous to watching a military commander who dislikes war, and with little combat experience, marching his troops toward a cliff,” he wrote the board.

Coury continues to defend the King deal. “It was a beautiful, beautiful marriage,” he says dreamily. “To this day I tell every one of my investors it was the best option for Mylan. Hands down.”

If the Merck unit wasn’t pursued, Coury inists many smaller deals would be necessary, which could have cost even more money, “even if they were available, in order to reach the same scale that Merck Generics creates by this one single transaction,” Coury says.

Maybe, Bob. But it might be best to buy some suntan lotion and lather up before heading to the new beachfront digs. You wouldn’t want to get burned.

Further reading…
MarketWatch;
[tags]Merck KgGA, Mylan Laboratories, Robert Coury[/tags]