Shire succumbs to £31bn takeover offer from US rival AbbVie

The deal as it stands, £24.44 in cash and 0.896 Abbvie shares, would give Shire’s investors a 25% stake in the combined company

London-listed drugmaker Shire, best known for its Vyvanse treatment for attention deficit hyperactivity disorder, has been courted by AbbVie since early May when it tabled its first bid proposal.

The two boards are now locked in “detailed discussions” in New York following the improved £53.20-a-share proposal, but AbbVie looks to have succeeded where US rival Pfizer failed in its much bigger £63 billion bid for AstraZeneca.

The deal as it stands, £24.44 in cash and 0.896 Abbvie shares, would give Shire’s investors a 25% stake in the combined company. The shares rose 128.5p to 4998.5p.

“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. Accordingly, the board is in detailed discussions with AbbVie in relation to these terms,” said the company.

The pursuit of Shire has stoked far less controversy than AstraZeneca because, apart from offices in Basingstoke, it is headquartered in Dublin but managed from Boston. The vast majority of Shire’s staff and sales are in the US.

AbbVie covets Shire’s rare diseases unit, bolstered by the $4.2 billion deal for US company ViroPharma last year, which the company is building up in response to more generic competitors to its ADHD drugs. It also wants Shire’s portfolio to reduce its reliance on top-selling rheumatoid arthritis drug Humira, which accounts for 60% of its sales but loses US patent protection in late 2016.

AbbVie, led by Richard Gonzalez, is looking to cut its US tax bill by moving its tax base to Britain, in a tactic known as inversion.

Mick Cooper, analyst at Edison Investment Research, said: “It is pleasing to see the two boards working well together and the proposed offer seems a fair price that represents good value for both companies’ shareholders.”

Shire previously fought to maintain its independence as chairman Susan Kilsby unveiled a new target to double annual product sales, which account for the bulk of revenues, to $10 billion by 2020.

The company was founded in 1986, with early successes including a range of calcium products to treat osteoporosis, and listed in 1996.

Comment: Behaving like grown-ups

IF Pfizer’s Ian Read was ever tempted to have another tilt at AstraZeneca he could do worse than look at how Shire and AbbVie have conducted themselves over the past few weeks.

Shire is a US firm in all but tax-base and listing, and so hasn’t inspired the same political sound and fury that Astra did, but what also stands out is the grown-up way in which the two boards have gone about their business. Pfizer’s sally was marked by its aggressive public tubthumping and precious little effort to engage the board. AbbVie and its target kept the exchanges cordial but forthright, the big shareholders had their say and Shire was willing to sit down when the US firm’s offer came into the ballpark.

The result is nearly $14 a share extra for Shire’s shareholders and an offer at a 53% premium to the price before the first approach. All with a minimum of fuss. Chair Susan Kilsby has done a good job: she might even get a few offers herself.

Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Arsenal supporters gather for a recent ‘fan party’ in New Jersey
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
Life and Style
Balmain's autumn/winter 2014 campaign, shot by Mario Sorrenti and featuring Binx Walton, Cara Delevingne, Jourdan Dunn, Ysaunny Brito, Issa Lish and Kayla Scott
fashionHow Olivier Rousteing is revitalising the house of Balmain
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
BBC broadcaster and presenter Evan Davis, who will be taking over from Jeremy Paxman on Newsnight
peopleForget Paxman - what will Evan Davis be like on Newsnight?
Life and Style
fashionCustomer complained about the visibly protruding ribs
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
ebookA unique anthology of reporting and analysis of a crucial period of history
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

The benefits of being in Recruitment at SThree...

£18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

Test Analyst - UAT - Credit Risk

£280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little