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Shire Rejects $46B AbbVie Offer

Stocks in this article: SHPG ABBV PFE AZN MDT COV SKY SNN

NEW YORK (The Deal) -- The M&A feeding frenzy in the healthcare sector continued on Friday as Ireland's Shire  (SHPG) confirmed it had received and rejected a series of proposals from AbbVie (ABBV), culminating in an offer that valued its stock at £27.2 billion ($46.6 billion).

The announcement came after Pfizer (PFE) late last month abandoned a £69.4 billion indicative offer for AstraZeneca (AZN) and followed speculation that hostile bid target Allergan Inc. was plotting a defensive takeover of Shire as a means to fend off Valeant Pharmaceuticals International and its $54 billion offer. Elsewhere devices maker Medtronic (MDT) on Monday unveiled a $42.9 billion offer for Ireland's Covidien (COV), while Stryker (SYK) last month admitted it had been weighing a bid for hip replacement specialist Smith & Nephew (SNN).

Shire said North Chicago-based Abbvie's latest, May 30 proposal valued its stock at 4,611 pence, based on AbbVie's weighted 30-day average share price. It broke down into 2,044 pence in cash and 0.7988 of an AbbVie share.

Like Pfizer, AbbVie wants to redomicile for tax purposes to the U.K. Shire said it had decided that the move carried "execution risks," while the offer itself, which it said was 23% more than Shire's Thursday closing price, was too low.

Shire's remit is to focus on specialist medical conditions--those that wouldn't be treated by a general practitioner--in areas of "significant unmet medical need." In January it closed a $4.2 billion takeover offer for ViroPharma (VPHM), of Exton, Pa., to gain drugs focused on treating and preventing hereditary angioedema, which causes spontaneous swelling of the skin and mucous membranes. And last month it arranged to pay $260 million upfront to buy San Diego-based Lumena Pharmaceuticals, which has two compounds in development to treat liver diseases in adults and children.

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