AbbVie makes €38bn offer for Dublin-based Shire
Published 09/07/2014 | 02:30
US drugmaker AbbVie raised its offer for Dublin-based Shire to £30.1bn (€37.8bn), hoping to win over its reluctant target after three earlier offers were rejected.
The latest cash-and-stock offer is 11pc higher than AbbVie's previous proposal, which the London-listed hyperactivity and rare diseases specialist had said fundamentally undervalued the company.
Shire, while founded in Britain, is today managed out of Boston, headquartered in Dublin and has most of its sales in the United States, resulting in a minimal business footprint in Britain or Ireland . As a result, the potential takeover of the company has not created the political storm that accompanied Pfizer's pursuit of AstraZeneca.
AbbVie is eager to buy Shire both to reduce its tax bill by moving its tax base to Britain - a tactic known as inversion - and to diversify its drug portfolio. The US company currently gets nearly 60pc of its revenue from rheumatoid arthritis drug Humira, the world's top-selling medicine, which loses US patent protection in late 2016.
Chief executive Richard Gonzalez has pressed the case for his pursuit of Shire in a series of meetings with shareholders on both sides of the Atlantic, after setting out the strategic rationale for a deal on June 25.
AbbVie said it had now met with, or spoken to, a large number of Shire investors, who collectively represented a majority of Shire's shares.
It is the second attempt by a US pharmaceutical company to buy a London-listed rival, after Pfizer's pursuit of AstraZeneca failed last month.
AbbVie said yesterday that the revised offer reflected a substantial sharing of potential synergies between the shareholders of each company, adding that Shire shareholders would own 24pc of the enlarged group.
"AbbVie has made a compelling offer to Shire that creates immediate and long-term value to shareholders of both companies. We think its shareholders should strongly encourage the Shire board to engage in constructive dialogue with AbbVie," Mr Gonzalez said.
AbbVie reiterated it wanted to move quickly, arguing it would create more value from Shire's assets than Shire could on its own. AbbVie must make a firm offer by July 18.