Shire’s stalker raises its offer

US pharmaceuticals group AbbVie has made a fourth attempt to bag London-listed Shire Pharmaceuticals. Its latest unsolicited bid is worth £30bn, or just over £51 a share – an 11% improvement on the previous bid.

AbbVie urged Shire’s shareholders to persuade the board to enter talks. AbbVie is best known for Humira, a rheumatoid arthritis drug. Shire specialises in drugs for attention deficit hyperactivity disorder.

What the commentators said

“It is extraordinarily hard,” said Alex Brummer in the Daily Mail, “to be as passionate about” defending Shire from AbbVie’s approach as it was when another predator, America’s Pfizer, was sniffing around AstraZeneca this year.

Back then, it was easy to point out that Pfizer was keen to take over Astra largely for tax purposes: it would keep its bills down by moving its domicile to the UK.

But this situation is different. While so-called tax inversion plays a part in AbbVie’s motives, “Shire’s role as a UK pharmaceutical powerhouse is undermined” by its own tax exile in Ireland, said Brummer; it has been based there for eight years. If AbbVie takes it over, Shire will actually come home.

In any case, Shire has never been a “research and development champion” in the Astra or GlaxoSmithKline mould. It has expanded largely by acquisition.

Plenty of shareholders will be happy with the offer, said Nils Pratley in The Guardian – the shares traded at £35 before the bid surfaced. But AbbVie can pay more. Bank of America reckons it could stretch to £59 and still break even.

Shire’s own growth target will also bolster its defences, said Navid Malik of Cenkos. It plans to double revenue by 2020, achievable given its “track record of building value”. “Its value as a stand-alone company is very compelling.”

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