AbbVie backtracks on Shire shareholder claims

A sweetened offer for Shire by AbbVie has been followed swiftly by a retraction from the latter’s chief executive Richard Gonzalez after he claimed most shareholders in the Irish-domiciled firm were backing the deal.

Gonzalez made the statements in interviews with the media to highlight AbbVie’s latest £51.15 per share offer for Shire, which values the specialist in ADHD and rare disease therapies at more than £30bn.

Claims that a sizeable proportion of Shire stockholders were on board with AbbVie’s approach raised eyebrows at the Takeover Panel in the UK, where shares in Shire are listed. According to UK takeover law, one company attempting to acquire another cannot make such claims without written evidence.

“AbbVie confirms that it has not received any written commitments of support and accordingly retracts the statements,” said the firm in a filing with the US Securities & Exchange Commission (SEC).

“In the absence of written statements of support from shareholders [AbbVie] is not in a position to make any statement of shareholder support.”

AbbVie’s latest offer consists of £22.44 in cash and 0.8568 shares in return for each Shire share, although analysts at Jefferies have suggested the US drugmaker may have to go even higher – perhaps to £55 per share in order to complete the transaction.

The latest offer – the fourth proposed by AbbVie to date – is indicative of how much the US company wants to complete the deal to take advantage of the Irish company’s low corporate tax rate, as well as to diversify its product portfolio and pipeline.

Since AbbVie was separated out of Abbott Laboratories last year it has been trying to reduce its reliance on arthritis blockbuster Humira (adalimumab) – which accounts for almost 60 per cent of its turnover – while it brings pipeline projects through to market such as its new combination therapy for hepatitis C.

The US drugmaker is facing patent expiry for Humira from 2016, and several companies – including Amgen, Novartis’ Sandoz unit and Boehringer Ingelheim – have already started developing biosimilar versions of the $9bn-a-year blockbuster.

Shire has made much of its potential as an independent company, saying last month it is expecting to double its turnover to $10bn by 2020.

The prevailing sentiment among analysts is that it will not adopt the same strategy as AstraZeneca, which was determined to block Pfizer’s takeover attempt at all costs, and could be coaxed to the negotiating table of the price is right.

“We expect that Shire’s board will respond to AbbVie by rejecting the current proposal, whilst indicating the offer price that would get them to engage and open their books,” said Jefferies analyst Jeffrey Holford in a research note.

Shire has moved swiftly to reject AbbVie’s earlier bids, but at the time of writing had merely said it would review the latest offer and was advising shareholders to take no action.

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AbbVie reveals Shire rejection of $46 billion bid

 

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