Shire Opens Door to Takeover by AbbVie

LONDON (The Deal) -- Irish drugs maker Shire (SHPG) on Monday said it had entered detailed discussions with suitor AbbVie (ABBV) about a fifth takeover proposal after eliciting a sweetened bid that values its stock at 31.4 billion POUNDS ($53.7 billion).

The Dublin maker of attention deficit hyperactivity disorder drug Vyanese said the new proposal values its stock at 5,320 pence per share, breaking down into 2,444 pence in cash and 0.8960 of a new AbbVie share. The takeover would give Shire shareholders about 25% of the combined company.

"The board of Shire has indicated to AbbVie that it would be willing to recommend an offer at the level of the revised proposal to Shire shareholders subject to satisfactory resolution of the other terms of the offer. Accordingly, the board is in detailed discussions with AbbVie in relation to these terms," it said.

Shire shares were up 123 pence, or 2.5%, at 4,993 pence by late morning in London.

The rapprochement counters initial expectations that the two sides would never see eye to eye on price, even though Shire CEO Flemming Ornskov said early on he was open to a deal in principle. It follows abortive bids by U.S. companies for two other major London-listed healthcare targets: Pfizer (PFE) 69.4 billion pound bid for AstraZeneca (AZN), which the New York company pulled in late May after the London target rejected a string of proposals; and Stryker Corp.'s exploratory work on an offer for devices maker Smith & Nephew plc, which ended before it had taken shape after an early media leak forced the U.S. company to retreat.

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