The US company has made three proposals since early May – the first at £39.50 per share ($67.33 per share), the third and most recent at £46.26 per share (in a mixture of cash and AbbVie shares). Both represent a substantial premium to the share price of £37.38 at the close of Thursday. The final deal would have valued the group at some £27 billion ($46 billion).
AbbVie said in a statement: “There can be no certainty that any firm offer will be made. Discussions are no longer ongoing.”
The statement seemed to leave the door open for future discussions, however, with no indication that the £46.26 price tag was final – which is likely to send Shire’s share price soaring.
The offer was described as “barely adequate” by Savvas Neophytou, analyst at Panmure Gordon, who argued AbbVie would have to come up with an offer over £50 per share to make the deal happen. “Shire’s rare diseases business is one of the hottest assets in biopharmaceuticals,” he wrote in a research note.
This could kick off a takeover battle for Shire, a perennial takeover target. It initially built a niche with amphetamine-based drugs to treat ADHD, but has used the revenues from these treatments to expand into lucrative orphan diseases and specialty pharmaceuticals.
US based AbbVie, which was spun out of larger Abbot Laboratories last year, now has until July 18 to make a full and final offer. Like many US-based pharmaceutical companies, it is seeking to bolster its pipeline, but also potentially to be more tax efficient.
Shire is based in Dublin for tax purposes, and buying it may also enable AbbVie to take advantage of a “tax inversion” by spending overseas revenues rather than bringing them back to the US to be taxed.