16th Oct 2014 05:30
SAINT HELIER (Alliance News) - US-based AbbVie In late Wednesday said its Board of Directors' withdraws its recommendation made on July 18, regarding the proposed transaction with Shire PLC and recommends that stockholders vote against the transaction.
AbbVie had earlier announced its Board's intention to reconsider its USD54.7 billion offer recommendation for the Irish drug company due to the impact of the US Treasury Notice to check tax inversion. Shire's Board had urged earlier on Wednesday that AbbVie should proceed with the recommended offer on the agreed terms.
In its latest announcement, AbbVie said the decision was made after a detailed consideration of the impact of the US Department of Treasury's unilateral changes to the tax rules, as issued on September 22.
"The breadth and scope of the changes, including the unexpected nature of the exercise of administrative authority to impact longstanding tax principles, and to target specifically a subset of companies that would be treated differently than either other inverted companies or foreign domiciled entities, introduced an unacceptable level of uncertainty to the transaction," AbbVie said in a statement.
Additionally, the changes eliminated some of the financial benefits of the deal, most notably the ability to access current and future global cash flows in a tax efficient manner as originally envisaged.
According to AbbVie, this fundamentally changed the implied value of Shire to AbbVie in a significant manner.
Under the conditions of AbbVie's offer and the terms of the Co-operation Agreement, the withdrawal of the recommendation alone will not cause a lapse of AbbVie's offer or terminate the Co-operation Agreement between AbbVie and Shire.
Unless Shire and the UK Takeover Panel agree otherwise, AbbVie must convene an AbbVie stockholder meeting to consider the adoption of the US merger agreement.
AbbVie's offer will lapse if the company's stockholders do not adopt the agreement.
Copyright RTT News/dpa-AFX
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Shire