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发帖数: 29846 | 1 http://online.wsj.com/articles/shire-gets-revised-abbvie-takeov
AbbVie Nears $54 Billion Shire Deal
Deal Would Be Latest 'Inversion' Play
By Hester Plumridge
connect
Updated July 14, 2014 2:13 p.m. ET
LONDON—U.S. drug maker AbbVie Inc. ABBV -0.02% is close to clinching
a deal to buy Dublin-based Shire SHPG +2.23% PLC for more than £
31 billion ($53.6 billion), in what would be one of the largest so-called
inversion deals through which U.S. companies are seeking a lower corporate
tax burden.
After four days of renewed talks between the two drug makers, Shire said
Monday it had received a revised offer from AbbVie of £53.20 a share
over the weekend. Shire said it would be willing to recommend the deal to
its shareholders subject to "satisfactory resolution of the other terms of
the offer."
The two sides are negotiating a breakup fee for the deal, as well as
discussing management positions and other governance issues, according to a
person familiar with the talks.
The latest proposal represents AbbVie's fifth attempt to take over Shire. At
almost $54 billion, a completed acquisition would be a contender for the
year's biggest merger, alongside Valeant Pharmaceuticals International Inc.
VRX.T +0.35% 's hostile attempt to take over Botox maker Allergan Inc
. AGN +0.01% for a similar amount. Shire's tentative agreement to
recommend AbbVie's new offer is good news for Valeant, as it likely removes
Shire as a potential partner for Allergan.
If Shire agrees to a deal, North Chicago, Ill.-based AbbVie plans to base
the new combined company in the U.K. to benefit from its lower corporate tax
rate. The move is part of a wave of U.S. health-care companies looking to
take advantage of European deals to lower their taxes.
More
Heard on the Street: AbbVie Pays Up to Move Shire
5 Things to Know About Inversions
What's Driving Inversion Trend
Why Pharma Is Flocking to Inversions
European Companies Fear U.S. 'Inversion' Takeovers
Abbott to Sell Generics Ops to Mylan
Vince Cable's Sound and Fury Signify Little for Shire, AbbVie
Britain Gets Tougher on Foreign Takeovers (July 13)
Shire, AbbVie Met to Discuss Takeover Proposal (July 11)
U.K. Rules Trip Up AbbVie's CEO (July 9)
AbbVie Raises Offer for Shire (July 8)
Homeward Bound for Shire? (July 8)
Shire Stopped 'In Its Tracks' by AbbVie Approach (June 27)
AbbVie Willing to Move Quickly to Engage With Shire (June 25)
Shire, AbbVie Set Out New Financial Targets (June 23)
Inversion Frenzy Rocks Drug Sector (June 20)
Also on Monday, Mylan Inc. MYL +0.60% of Canonsburg, Pa., agreed to
buy pharmaceutical assets from AbbVie's former parent, Abbott Laboratories
ABT +0.82% , in a $5.3 billion deal that will create a new entity
organized in the Netherlands. Mylan's move came after Sweden's Meda MEDA-A
.SK -4.65% AB spurned several tax-inversion takeover approaches from
Mylan.
Pfizer Inc. PFE +0.86% tried and failed to buy AstraZeneca AZN.LN +0
.37% PLC for around $120 billion to relocate in the U.K. in May.
In the biggest successful inversion deal so far this year, Ireland's
Covidien COV -0.24% PLC agreed to a $42.9 billion takeover deal by
Minneapolis-based medical-device company Medtronic Inc., MDT +0.38%
the latest in a wave of Irish takeovers.
Tax considerations appear to be the primary driver in AbbVie's courtship of
Shire. The companies have little overlap in their respective businesses,
limiting likely cost synergies. Shire's tax rate on its income, measured by
non-U.S. accounting standards, was 17% in the first quarter, though Irish
corporate tax rates tend to be lower than those in the U.K. AbbVie's was 22.
3%, adjusted for asset amortization and certain other costs.
AbbVie says it wants to acquire Shire to diversify: It lacks a presence in
Shire's twin specialties of drugs to treat attention-deficit disorder and
treatments for rare genetic diseases like Hunter's syndrome. AbbVie also
argues its greater global resources and scale could help boost Shire's sales
and its larger pool of scientists and regulatory experts could accelerate
Shire's new-drug research and development.
But industry experts say the benefit of a larger sales force could be
limited, since drugs for rare diseases are prescribed through just a handful
of specialist physicians. And the industry overall has been slimming down R
&D departments on the premise that innovation flourishes in smaller, biotech
-style units.
"I think the main strategic rationale here is tax inversion," Shire Chief
Executive Flemming Ornskov said of the AbbVie approach in an interview last
month. "I think that the overlap on the therapeutic areas is limited to
gastrointestinal diseases." Mr. Ornskov wasn't available for comment Monday.
The new AbbVie offer comprises £24.44 in cash and 0.8960 AbbVie share
per Shire share. Shire shareholders would end up owning around 25% of the
new combined company—above the 20% threshold needed to pursue an inversion.
Shire's board had previously raised concerns about the execution risk of
such a deal. On Sunday, U.K. Business Secretary Vince Cable announced plans
to strengthen Britain's takeover rules to make it harder for acquirers to
renege on promises made as part of a deal, adding that he had been
influenced by Pfizer's recent takeover attempt for AstraZeneca. However, a
representative of Mr. Cable's office said Monday that the government has no
specific concerns about AbbVie's bid for Shire.
U.S. politicians are also talking about ways to tighten up the rules on tax
inversions, including raising the bar for ownership of a new combined
company by the target company's shareholders to 50% from 20%.
Shire's board had previously rejected four takeover offers from AbbVie, the
first valued at £46.26 a share in mid-June. AbbVie's latest offer
represents a 45% premium to Shire's closing share price the day before its
first offer was made. Shire's board had been under pressure from investors
to keep negotiating with AbbVie.
AbbVie has until Friday under U.K. takeover rules to announce a firm offer
for Shire or walk away. Shire said Monday there could be no certainty that a
firm offer would be made.
AbbVie, which was spun off from Abbott Laboratories in early 2013, makes the
world's top-grossing drug, the rheumatoid-arthritis treatment Humira,
responsible for more than half of its sales. A Shire acquisition would help
diversify AbbVie's current focus on anti-inflammatory, HIV and cancer drugs
and reduce its dependence on Humira before its U.S. patent expires in 2016.
Shire's top-selling drug, Vyvanse, treats attention-deficit disorder. The
continuing controversy over prescribing amphetamine products like Vyvanse to
children has put some potential buyers off in the past, industry experts
say, but thanks to recent acquisitions, Shire's sales are now shifting more
to rare diseases.
Mr. Ornskov expects the company's focus to shift further toward rare
diseases. He set out new targets last month to raise annual sales to $10
billion by 2020, up from $4.9 billion in 2013, with drugs in Shire's
development pipeline to make up just under a third of that figure.
Analysts had expected that other drug makers, such as Allergan, Bristol-
Myers Squibb Co. BMY +0.79% or France's Sanofi SA, SAN.FR +0.87%
might put in a rival bid for Shire, attracted by its high-margin rare-
disease franchise.
Shares in Shire were up 1.8% in afternoon trading Monday to £49.58,
having traded as high as £50.50 earlier. |
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