Will we end the week on a high note? U.S stocks are higher on Friday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) up 0.16% and 0.22%, respectively, at 10:20 a.m. EDT. More than five years after Lehman Brothers' bankruptcy, Keynes' "animal spirits" are observable in the stock market's series of all-time highs (and its valuation), and in corporate behavior as well. If companies are still reluctant to dip into their massive cash piles to make capital investments, they're not shy about using some of that cash for acquisitions, with 2014 turning into a boom year for M&A. There is more news on that front this morning, as U.S. pharmaceuticals group AbbVie (NYSE:ABBV) announced that Ireland-based Shire (NASDAQ: SHPG) had rebuffed its advances three times.

Nasdaq-listed shares of Shire were up a whopping 19% in morning trading. AbbVie's initial cash and share offer, made early last month, valued Shire at GBP 39.50 ($67.55) per share. AbbVie then raised its offer twice, with a final (for now) offer at GBP 46.26 ($79.10). Shares of Shire opened up 14% on the London Stock Exchange, at GBP 42.30.

Shire's franchise, particularly in rare diseases, is attractive in a market that is undergoing a furious round of consolidation. However, there is another factor driving interest in the company that has nothing to do with patents or product pipeline: the charms of Ireland and its 12.5% corporate tax rate. Indeed, under certain conditions, gobbling up Shire would enable a U.S. acquirer such as AbbVie to switch its tax domicile under a process known as "inversion."

Last month, Pfizer abandoned its pursuit of U.K. rival AstraZeneca; the tax inversion was one of the driving factors behind Pfizer's interest. Last weekend, medical devices manufacturer Medtronic announced it was acquiring Covidien in a transaction that will feature tax inversion.

AbbVie said the companies are no longer in talks, and, under the City of London Code on Takeovers and Mergers, it now has until July 18 to make a firm offer or walk away for a mandatory six-month cooling-off period. Shire is now "in play" -- today's share price rise tells us as much. Whether AbbVie ultimately takes home this prize is yet to be seen, but I wouldn't expect Shire to remain independent in this environment. That's the bet the market appears to be making; Absent an acquirer willing to pay a premium for Shire's shares, they look significantly expensive at nearly 42 times the forward earnings-per-share estimate (per Morningstar).