Tags: AbbVie | Shire | drugs | ADHD

AbbVie Raises Offer for Shire to $51.5 Billion in Fourth Bid

Tuesday, 08 Jul 2014 08:28 AM

AbbVie Inc., the drugmaker split last year from Abbott Laboratories, made a fourth offer to buy Shire Plc, raising the price to about 30.1 billion pounds ($51.5 billion) in an effort to bring Shire to the negotiating table.

AbbVie increased the offer by about 11 percent to 51.15 pounds a share in cash and stock, the company said in a statement today. Previously, AbbVie made three bids, escalating to 27.3 billion pounds, a price that Shire’s board unanimously rejected, saying it undervalued the company.

“AbbVie has made a compelling offer to Shire that creates immediate and long-term value to shareholders of both companies,” Richard Gonzalez, AbbVie’s chief executive officer, said in the statement. “We think its shareholders should strongly encourage the Shire board to engage in constructive dialogue with AbbVie.”

Buying Shire would allow North Chicago, Illinois-based AbbVie to have its tax domicile in the U.K., which has a lower tax rate than the U.S. The addition of Shire’s array of rare disease treatments and drugs for attention deficit hyperactivity disorder would also diversify AbbVie’s product portfolio, which is currently dominated by a single medicine, the arthritis therapy Humira.

Flemming Ornskov, Shire’s CEO since May last year, has argued to keep his company independent, projecting that product sales will double to $10 billion by 2020 as Shire expands in drugs for eye maladies and other rare diseases.

Eye Drug

Ornskov has also touted his resume, including bringing the blockbuster eye drug Lucentis to Novartis AG, and cost cutting and improved profit in his first year as Shire’s CEO, hoping to convince investors to leave Shire’s management with him.

Shire shares rose 1.3 percent to 47.13 pounds at 1 p.m. in London. AbbVie put the value of its previous bid at 46.26 pounds a share.

Besides rare disease treatments, Shire makes drugs for attention deficit including Vyvanse and Adderall XR. ADHD treatments accounted for about 39 percent of Shire’s revenue last year.

AbbVie’s bid for Shire is the latest attempted merger in a period of increased acquisition activity in the drug and medical device industry. Not including the AbbVie offer, there were deals proposed or completed worth about $260 billion in the second quarter, according to data compiled by Bloomberg, five times more than any quarter since at least 2009. Pfizer Inc.’s $117 billion rebuffed bid for AstraZeneca Plc was the largest proposed deal in drug industry history.

Companies such as Bristol-Myers Squibb Co. and Allergan Inc. may also be interested in pursuing Shire, analysts have said.

While Shire’s tax domicile is in Dublin, AbbVie has said the combined company would be domiciled in the U.K.

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AbbVie Inc., the drugmaker split last year from Abbott Laboratories, made a fourth offer to buy Shire Plc, raising the price to about 30.1 billion pounds ($51.5 billion) in an effort to bring Shire to the negotiating table.
AbbVie, Shire, drugs, ADHD
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2014-28-08
Tuesday, 08 Jul 2014 08:28 AM
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