AbbVie raises its bid for Shire by about 11 pct (Update)

U.S. drugmaker AbbVie has boosted its offer for Shire by 11 percent to about $51.3 billion, hoping it will be enough to pique the interest of its British counterpart.

Shire, known for its rare-disease drugs, has rejected three AbbVie offers to date.

North Chicago, Illinois-based AbbVie is now making an unsolicited offer of 51.15 British pounds ($87.57) per Shire PLC share in cash and stock. Its prior bid was worth about 46.26 pounds ($79.20) per share for a total value of 27 billion pounds ($46.2 billion).

AbbVie said that its revised proposal also increases the ownership held by Shire shareholders to about 24 percent of the new holding company. It previously offered approximately 23 percent ownership.

Shire said in a statement that it did not get a look at AbbVie's revised proposal prior to the company's announcement. Shire said its board will meet to consider the bid and that it will make a further announcement "in due course."

Last month AbbVie said that one of the reasons it was interested in Shire was that it saw a compelling tax break. AbbVie said at that time that it expected the combined company to pay a tax rate of about 13 percent by 2016 after AbbVie reincorporates on the British island of Jersey, where Shire is headquartered. That would be down from its current rate of roughly 22 percent.

Several other U.S. companies are using mergers to reincorporate in countries with lower tax rates. These moves are raising concerns among U.S. lawmakers since they can cost the federal government billions in tax revenue.

AbbVie executives have also said that the product portfolios of the two companies complement each other, and that the combination would immediately give Shire a broader geographic reach.

Shire has said that AbbVie's overtures undervalue the company and its prospects. The drugmaker has also said that its board had concerns about AbbVie's interest in making the move for tax purposes.

AbbVie, which was spun off from Abbott Laboratories last year, has until July 18 to either announce a firm offer or confirm that it won't make one under United Kingdom takeover laws.

AbbVie's stock fell 90 cents to $56.50 in Tuesday premarket trading.

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Takeover target Shire promises strong growth

Jun 23, 2014

Takeover target Shire on Monday highlighted its potential as a standalone drugmaker, offering investors a rosy projection of its earnings potential that it believes is not reflected in the acquisition proposal made by U.S.-based ...

AbbVie cites tax break as a Shire deal motivator

Jun 25, 2014

U.S. drugmaker AbbVie sees a compelling tax break behind its roughly $46 billion bid to buy British counterpart Shire, and it expects the deal to expand Shire's global reach as well.

Recommended for you

Determine patient preferences by means of conjoint analysis

Jul 29, 2014

The Conjoint Analysis (CA) method is in principle suitable to find out which preferences patients have regarding treatment goals. However, to widely use it in health economic evaluations, some (primarily methodological) issues ...

FDA approves hard-to-abuse narcotic painkiller

Jul 25, 2014

(HealthDay)—A new formulation of a powerful narcotic painkiller that discourages potential abusers from snorting or injecting the drug has been approved by the U.S. Food and Drug Administration.

Race affects opioid selection for cancer pain

Jul 25, 2014

(HealthDay)—Racial disparities exist in the type of opioid prescribed for cancer pain, according to a study published online July 21 in the Journal of Clinical Oncology.

FDA approves tough-to-abuse formulation of oxycodone

Jul 25, 2014

(HealthDay)—Targiniq ER (oxycodone hydrochloride and naloxone hydrochloride extended release) has been approved by the U.S. Food and Drug Administration as a long-term, around-the-clock treatment for severe ...

User comments