20th Jun 2014 08:30
LONDON (Alliance News) - US pharmaceutical research and development company AbbVie Inc Friday confirmed that it has made three indicative takeover approaches which have been rejected by British pharma company Shire PLC, and talks between the two companies have now ended.
Shire shares have been soaring in recent weeks, driven by speculation that it would be a target amid a pickup in merger and acquisition activity in the pharmaceuticals sector. In recent weeks, AstraZeneca PLC successfully fended off a takeover approach from US rival Pfizer Inc, while Valeant Pharmaceuticals Inc has taken a USD53 billion offer for Botox maker Allergan Inc direct to shareholders after repeatedly being rebuffed. Allergan was reported previously to have approached Shire.
In a statement, 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.
Shire said it will more than double its 2013 annual product sales to USD10 billion by 2020.
"Shire has a long track record of delivering for shareholders and addressing unmet patient needs. Our
high-performing management team and focused strategy are producing even stronger results, reflected in our recent top-line growth and increased profitability," Shire Chairman Susan Kilsby said in a statement.
"With an expanded portfolio focused on high-growth opportunities, an efficient cost base and an enhanced innovative pipeline, we have put in place a platform for long-term value creation. We believe that Shire has a strong independent future," she added.
The British company said AbbVie's third offer comprised GBP20.44 in cash and 0.7988 AbbVie shares per Shire share.
Now that AbbVie has gone public with its approach, it has until July 18 to make a firm offer or to walk away.
Shire's biggest treatment area is medicines for attention deficit hyperactivity disorder, while it also makes drugs for rare genetic disorders and specialty diseases. AbbVie, which was spun out of Abbott Laboratories in 2012, makes most of its revenue from one drug, rheumatoid arthritis treatment Humira, and is looking to diversify its portfolio.
US pharmaceuticals companies are looking to do quick deals with foreign companies. That would allow them to base themselves abroad for tax purposes, lowering their corporate tax bills. US lawmakers are discussing moves to close this tax loophole.
Shire confirmed that AbbVie's proposals involved a new US listed holding company with a UK tax domicile.
Shire's shares have been among the top gainers on the FTSE 100 for several days due to the takeover speculation, although they closed slightly lower Thursday. The stock was up 12% at 4,185 pence Friday morning, by far the top gainer on the FTSE 100.
The stock is up 25.7% over the past month, 34.5% over the last three months, and up 106.5% over the past year, outperforming a 10.2% rise in the FTSE 100 over the same 12 months
By Steve McGrath; [email protected]; @SteveMcGrath1
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