AbbVie Inc moved a step closer to buying Shire Plc after the Dublin-based company said it is willing to back a fifth offer of £31.4bn (€39.4bn) just four days before the deadline to strike a deal.
Shire would support a formal bid of £53.20 (€66.7) a share, or 9.2 percent more than Shire’s closing share price on July 11, Shire said in a statement yesterday.
That price would make the acquisition the biggest in the industry this year. AbbVie made four previous offers.
Buying Shire allows AbbVie, currently based in North Chicago, Illinois, to move its tax residence to the UK and add treatments for rare diseases and attention deficit disorder, easing the company’s reliance on the rheumatoid arthritis injection humira. The companies have a July 18 deadline set by UK regulators to work out an agreement, though Shire could now seek an extension.
“I think this is probably it,” said Alex Arfaei, a New York-based analyst at BMO Capital Markets Corp, in a telephone interview. “At this level, it’s a pretty high probability it’ll be able to go through.”
Shire said in its statement that AbbVie yesterday proposed paying £24.44 (€30.65) in cash and 0.896 AbbVie shares for every Shire share.
Shire declined to say if it will seek an extension to nail down the bid, which would give Shire investors ownership of about 25 percent of AbbVie stock.
The two companies are still in talks on other issues and there’s no certainty a deal will be done, Shire said.
If no deal is approved by July 18, or by an extended deadline agreed to by UK regulators, AbbVie must walk away for as long as six months. Adelle Infante, a spokeswoman for AbbVie, declined to comment on the new offer.
The Pfizer Inc. pursuit of London-based AstraZeneca Plc earlier this year ran into the UK Takeover Panel’s deadline as the companies could not agree on a price. New York-based Pfizer can approach AstraZeneca again after six months.
“The board of Shire has indicated to AbbVie that it would be willing to recommend an offer at the level of the revised proposal to Shire shareholders subject to satisfactory resolution of the other terms of the offer,” Shire said in today’s statement.
“Accordingly, the board is in detailed discussions with AbbVie in relation to these terms.”
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