Shire Plc (SHPG) confirmed before the open on Friday said that it has rejected a $46 billion bid from AbbVie (ABBV), which represented a 25% premium to Shire’s Thursday closing price. The board unanimously rejected the proposal because it “fundamentally undervalued the company and its prospects.” AbbVie said that it had made three cash/share proposals to Shire, with the latest at £46.26 (or $78.87) per share. Under U.K. law, AbbVie has until July 18 to announce a firm intention to make an offer.
SHPG is up 12% in early trading on Friday.
Shire is an attractive takeover candidate not only because of a growing orphan disease franchise but because of its Irish domicile, which would meaningfully lower the company’s corporate tax rate. In January PropThink outlined a few other potential targets for tax inversion, noting that Questcor Pharmaceuticals (QCOR), which was bought by Mallinckrodt shortly thereafter, was a likely target. You can read more, and find out why some investors argue that Amarin (AMRN) is another potential acquisition target, here.
