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Shire takeover edges closer

Article By: ,  Financial Analyst
July 14, 2014 10:15 AM

A takeover of British pharmaceutical company Shire edged closer after it recommended a purchase by US rival AbbVie.

The board of the London-listed drug firm pledged its support to the £31 billion acquisition following a long-running attempt by AbbVie to buy Shire. If pushed through, the US firm will pay £53.20 per share and it would provide Shire shareholders with 25 per cent of the combined company. It marks the fifth attempt AbbVie has made to buy the firm.

Shire said in a statement: "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."

However, it was keen to stress that it while it was in "detailed discussions" with the US company there was no certainty that a formal bid would be submitted. Shire has previously rejected four proposals from AbbVie stating that it felt it was being undervalued. Shareholders have now been pressuring Shire for a sale claiming that the £51 mark represents a good figure.

Shire is a speciality biopharmaceuticals which focuses on neuroscience, rare diseases, gastrointestinal and internal medicine. Its expertise lie in creating medication for extremely and life-threatening conditions like Hunter syndrome and Fabry disease. It has also worked on drugs to treat attention deficit hyperactivity disorder (ADHD) or ulcerative colitis which have the potential to affect both the patient and their family.

This latest follows Pfizer's failed attempts to purchase another British drugmaker – AstraZeneca. The US firm had a number of proposals knocked back before officially ending its interest in the takeover in late May. There had been a £69 billion approach in the works but it failed to turn this into a formal bid and thus withdrew its interest.

Shire's share price was up 2.48 per cent at 4,991.00 at 08:53 this morning (July 14th).

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