AbbVie Ups the Stakes in Its Attempt to Acquire Shire

AbbVie boosts its offer price by 11% and pitches its buyout proposal directly to shareholders representing a majority of Shire's outstanding shares.

Jul 8, 2014 at 1:20PM

Global pharmaceutical giant AbbVie (NYSE:ABBV), perhaps best-known for producing the current best-selling drug in the world, arthritis treatment Humira, outlined a new proposal this morning that would boost its previous offer price to purchase Irish drugmaker Shire (NASDAQ:SHPG) by 11%.

AbbVie's new proposal, which was specifically pitched to Shire's largest shareholders, values Shire at 51.15 British pounds per share, or $51.3 billion, up from its prior unsolicited bid of $46.2 billion, which was originally proposed on May 30. The new proposal boosts the per-share cash component by 10% to 22.44 British pounds and offers 0.8568 shares of new AbbVie common stock to Shire shareholders. As noted by AbbVie, this would boost Shire's stake in the new company to 24%.

According to AbbVie CEO Richard Gonzalez,

AbbVie will bring greater financial strength and R&D experience to this combination that will enable both companies to reach their full potential for their shareholders and patients in need across the globe.

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.

Not to mention, Ireland's corporate marginal tax rate peaks at 12.5% compared to a 40% peak corporate marginal tax rate in the U.S., which could bring substantial tax savings if AbbVie relocated its headquarters.

AbbVie has encouraged Shire's largest investors to consider its new potential offer and take their ideas to Shire's board of directors. Under U.K. takeover laws, AbbVie needs to either submit a formal proposal by July 18 or walk away from its attempt to purchase Shire.

Shire's board of directors has confirmed that it will meet to discuss the new proposal, but advises existing shareholders not to take any action based on AbbVie's as-of-now informal proposal.

Shire, known for its rare-disease drugs, has rejected three AbbVie offers to date. Shire has said that AbbVie's overtures undervalue the company and its prospects. The drugmaker has also said that its board had concerns about AbbVie's interest in making the move for tax purposes.

As of midday trading, both companies were moving modestly lower with both AbbVie and Shire shares down around 3%.

-- Material from The Associated Press was used in this report.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. And there's one small company making Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

The Motley Fool owns shares of, and recommends Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers