Shire to back AbbVie's $53bn offer

Comment on this story

London - London-listed drugmaker Shire said on Monday it was ready to recommend a new 31 billion pounds ($53 billion) takeover offer from AbbVie, entering talks after receiving a fifth bid from the US firm.

Chicago-based AbbVie, which wants to buy Shire to cut its tax bill and diversify its product line-up, made the new offer of 53.20 pounds per share on Sunday following a request from the Dublin-based group for an improvement on the previous approach at 51.15 pounds per share.

Reuters had reported on Saturday that Shire, a maker of drugs for rare diseases, had asked AbbVie to sweeten its offer to close to 53 pounds per share, in order for it to recommend the deal.

Shares in the group were up 2.7 percent at 50.00 pounds in early trading on Monday.

In a statement, Shire said the new bid comprised 24.44 pounds in cash and 0.8960 shares of new AbbVie shares and would result in Shire investors owning around 25 percent of the combined new firm.

“The board of Shire has indicated to AbbVie that it would be willing to recommend an offer at the level of the revised proposal to Shire shareholders,” it said.

“Accordingly, the board is in detailed discussions with AbbVie in relation to these terms.”

AbbVie is eager to buy Shire both to reduce its US tax bill by moving its tax base to Britain - a tactic known as inversion - and to diversify its drug portfolio.

AbbVie currently gets nearly 60 percent of its revenue from rheumatoid arthritis drug Humira, the world's top-selling medicine, which loses US patent protection in late 2016.

AbbVie's move on Shire is the second attempt by a US drugmaker to buy a London-listed rival after Pfizer's $118 billion pursuit of AstraZeneca failed last month over price.

That deal was also driven in large part by tax savings.

Shire, founded in Britain, is headquartered in Dublin but managed from Boston and has most of its sales in the United States, resulting in a minimal business footprint in Britain.

As a result, the potential takeover of the company has not created the political storm that accompanied Pfizer's pursuit of AstraZeneca.

Shire chief executive Flemming Ornskov had said he was happy for the company to be sold at the right price, but like AstraZeneca, he had set out a detailed case as to why it was worth a lot more than AbbVie was originally offering. - Reuters

sign up

Comment Guidelines

  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

  5. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. You are only required to verify your email address once to have full access to commenting on articles. For more information please read our comment guidelines