U.S stocks are climbing back toward this month's record high on Monday morning, with the benchmark S&P 500 and the narrower Dow Jones Industrial Average (DJINDICES:^DJI) up 0.51% and 0.72%, respectively, at 10:15 a.m. EDT. Pharmaceutical companies are once again "lighting up the board" this morning, with news that AbbVie (NYSE:ABBV) has made a fifth offer for Shire (NASDAQ: SHPG); the two companies are now in advanced negotiations to finalize the $53 billion deal.

A deal is going to get done. This morning, Shire announced that it "requested and has received a further revised proposal from AbbVie" on Sunday. This is AbbVie's fifth offer, and Shire says it is willing to endorse an offer on these financial terms "subject to satisfactory resolution of the other terms of the offer" (which Shire's board is currently negotiating with AbbVie).

Just what are the new financial terms? AbbCie's latest offer comprises $41.83 in cash and 0.896 shares of AbbVie per Shire share. That offer is worth $91.04 based on Friday's closing prices -- a 42% premium to Shire's closing share price on Jun. 19, the last day prior to AbbVie's interest becoming public knowledge. As of 9:45 a.m. EDT, with AbbVie trading at $54.50, the offer is now worth $90.74, a 7% premium to the price of Shire shares on the London Stock Exchange. Manifestly, the market believes the deal will happen on terms that are at least as attractive as those AbbVie is now offering.

What would AbbVie be getting for that price? First, the potential transaction is notable for its "inversion" feature, according to which AbbVie would switch its tax domicile to the U.K. (Shire is currently domiciled in Ireland), thus avoiding the 35% U.S. repatriation tax on overseas cash holdings and benefiting from a lower corporate tax rate. This is a highly prized perk; in fact, it was a driving factor behind Pfizer's failed pursuit of AstraZeneca earlier this year.

Shire's best-selling drug, Vyvanse, treats attention deficit hyperactivity disorder, but under new CEO Flemming Ornskov, the company has started building an attractive rare-diseases franchise. Rare diseases are a fast-growing, highly lucrative health care segment: Even though patient numbers are relatively small, treatments are expensive (and thus profitable). Last month, Mr. Ornskov announced new targets to double annual sales to $10 billion by 2020.

And speaking of Mr. Ornskov, I think he could be a potential hidden asset in this deal. Though he only joined Shire last May, he has a great track record as a shareholder-friendly manager, and he has had a good start at Shire. Sanford Bernstein & Co. analyst Ronny Gal didn't mince words when he gave Bloomberg his assessment of Ornskov's tenure last month:

So far, very impressive. First, he took an axe to the cost structure. ... None of [the acquisitions he has made] were stupid. They're all interesting assets.

If AbbVie's board is smart, they'll find a way to retain him, though that will be difficult: At 58, AbbVie CEO Rick Gonzalez is just two years older than Mr. Ornskov.