20th Jun 2014 14:07
LONDON (Alliance News) - US pharmaceutical research and development company AbbVie Inc is considering raising its takeover offer for Shire PLC, which would be a fourth offer after it confirmed that it already has made three rejected offers for the British pharmaceutical company, Bloomberg reported Friday citing people familiar with the matter.
AbbVie management believes pressure from shareholders may lead Shire to examine a bid, and so is considering bumping up its offer as early as next week, the report said. It also is considering making a presentation on the benefits of such a transaction in hopes of generating interest from Shire shareholders, according to Bloomberg.
In a statement earlier Friday AbbVie said it had first approached Shire in early May with a GBP39.50 cash and shares offer for each of the British company's shares. That would have valued Shire at GBP23.3 billion a share. Its third and latest offer was GBP46.26 a share in cash and shares, it said, valuing Shire's share capital at GBP27.2 billion.
In a separate statement, Shire said it rejected the approaches because it thinks the offers undervalued the company and it can deliver better value to its shareholders by staying independent. It confirmed it had met with AbbVie to give the US company a chance to explain its proposals, and its board unanimously rejected the approach after that.
Now that AbbVie has gone public with the approach, it has until July 18 to make a firm offer.
There has been a flurry of merger and acquisition activity in the pharmaceuticals sector in the last few months, particularly from US companies looking to do deals with foreign companies which would allow them to re-domicile abroad to lower their corporate tax bills.
US drugmaker Pfizer Inc abandoned its bid for AstraZeneca PLC at the end of May, and Valeant Pharmaceuticals Inc has recently taken a USD53 billion offer for Botox maker Allergan Inc direct to shareholders after repeatedly being rebuffed
Shares in Shire have been performing well as a result of takeover speculation, and Shire is trading up 19% at 4,440.00 pence Friday afternoon, by far the biggest gainer on the FTSE 100 and an all-time high for Shire.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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