Shire Holding Takeover Talks With AbbVie

Shire Plc (SHP) has begun negotiating with AbbVie Inc. (ABBV) for a deal to combine the two drugmakers after the U.S. company raised its takeover offer to about $51.5 billion, people with knowledge of the matter said.

AbbVie Chief Executive Officer Richard Gonzalez met in New York with officials from Shire for the discussions, which are at an early stage, the people said, asking not to be identified discussing a private matter. Shire, in a statement responding to Bloomberg News today, said it has held “a meeting with representatives of AbbVie,” without elaborating.

The talks may not lead to an agreement, the people said.

As part of the deal, North Chicago, Illinois-based AbbVie would move its legal address to the U.K., thereby dropping its tax rate to 13 percent from about 22 percent. Shire’s rare disease treatments and drugs for attention deficit hyperactivity disorder would also give AbbVie a broader array of products beyond the rheumatoid arthritis injection Humira, which accounts for more than half of sales.

AbbVie made a fourth offer for Shire on July 8, valuing the Dublin-based company’s shares at 51.15 pounds each, or about 30.1 billion pounds ($51.5 billion) in total. Shire, which had rejected the previous offers saying they undervalued the prospects of its rare-disease medicines, hasn’t made a formal response.

Source: AbbVie.com via Bloomberg

AbbVie Inc. Chief Executive Officer Richard Gonzalez. Close

AbbVie Inc. Chief Executive Officer Richard Gonzalez.

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Source: AbbVie.com via Bloomberg

AbbVie Inc. Chief Executive Officer Richard Gonzalez.

Investor Campaign

Shire rose 5.9 percent to 48.70 pounds in London today, valuing the company at 28.7 billion pounds. Its U.S.-listed ADR’s gained 4.4 percent to close at $249.06 in New York. AbbVie slipped less than 1 percent to $54.96.

Since the raised offer, Shire has been hearing from top shareholders pushing the company to come to the table and work out a deal -- in letters, telephone calls and meetings with Shire’s Chairwoman Susan Kilsby. The campaign is being encouraged by AbbVie and its advisers, people with knowledge of the matter have said.

The companies have a July 18 deadline set by U.K. regulations to work out an agreement. If no deal is approved by then, AbbVie must walk away for as long as six months.

Adelle Infante, a spokeswoman for AbbVie, didn’t have a comment on the talks.

A corporate jet registered to AbbVie traveled to Teterboro Airport in New Jersey from the Chicago area yesterday, according to data provider FlightAware. The data doesn’t indicate who was on the aircraft, which has since left the New York-area and is now in Boca Raton, Florida.

While Shire’s tax domicile is in Ireland, AbbVie has said the combined company would be domiciled in the U.K., where Shire has some executive offices. AbbVie’s top managers will continue to work in North Chicago.

To contact the reporters on this story: Matthew Campbell in London at mcampbell39@bloomberg.net; David Welch in New York at dwelch12@bloomberg.net

To contact the editors responsible for this story: Mohammed Hadi at mhadi1@bloomberg.net Drew Armstrong

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