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Shire Will Be Bought, Say Investors:

NEW YORK (TheStreet) -- Investors say AbbVie's (ABBV) pursuit of Irish drug company Shire (SHPG - Get Report) won't end like Pfizer's (PFE) failed bid for AstraZeneca (AZN).

On, investors bet that Shire's Friday morning rejection of AbbVie's $46.3 billion bid for the foreign pharmaceutical company would be met with a higher bid -- if not from AbbVie than another pharmaceutical company. Allergan (AGN) was the most discussed potential suitor on the site. The stock rose 16% on Friday.

$SHPG Was previously rumored that $AGN approached them; 6/16 we heard $SHPG hired an adviser to deal with takeover offers

? Open Outcrier (@openoutcrier) Jun. 20 at 08:31 AM

Imminent bid expected for $SHPG from $AGN to fend off $VRX bid. Wow, call it "acquisition roulette."

? Pierce Crosby (@CrosbyVenture) Jun. 18 at 10:04 AM

The rejection comes in the wake of Pfizer's failed $118 billion merger with the UK's AstraZeneca. U.S. drug companies have pursued smaller foreign competitors in hopes of increasing scale and taking advantage of more favorable corporate tax laws in places like Ireland. Corporations in the U.S. currently pay 35%, according to Deloitte. In Shire's hometown of Dublin, the income tax rate is 12.5%.

Shire management said Friday that AbbVie's bid significantly undervalued the company. The company said that the 23% premium AbbVie offered to its closing share price on June 19 "fundamentally undervalued" its prospects to be a leader in the rare disease and specialty markets. In addition to drugs like Adderal XR, the company has about 17 compounds in various human trial stages that focus on rare diseases.

"The Board believes the Proposal fundamentally undervalued Shire and its prospects and that as an independent company Shire's focused growth strategy will continue to deliver significant shareholder value and patient benefits," management wrote in a statement.

$SHPG says the offer still 'fundamentally undervalued the company'. Agree. Waiting for Roche?

? Clock_workorange (@Clock_workorange) Jun. 20 at 03:57 AM

Some investors believe that Shire may be overplaying its hand.

$SHPG it's not going to get bought

? jon (@twostatesolution) Jun. 20 at 07:21 AM

But most think a higher bid is in the offing.

$SHPG rejects bid at 235 & rumors of higher bid next week... Go figure!

? boyplunger (@Ibuyjunk) Jun. 20 at 12:26 PM

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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