Billionaire Singer threatens to sue AbbVie over Shire breakup

Paul Singer

A $1.64 billion breakup fee may have placated buyout target Shire ($SHPG) after AbbVie ($ABBV) pulled the plug on their $55 billion agreement. But investors? At least one may still be planning a little ax-grinding.

Billionaire Paul Singer, founder and CEO of hedge fund Elliott Management, is considering suing the Illinois pharma for calling off the deal, he told investors this week in a third-quarter investor letter seen by the New York Post.

"We are exploring our options with respect to this matter, including whether to assert claims against AbbVie for making false and misleading statements about the transaction," he wrote.

As the Post points out, Singer was quick to cut his losses after AbbVie killed the deal, selling 1.6 million Shire shares on Oct. 15--the day the Irish pharma's stock dove 22% on the London Stock Exchange. That dump may have helped him dodge the fallout that weighed down other large Shire investors, like Frank Brosens' Taconic Capital, which fell 2.5 % last month, and John Paulson, whose Advantage fund fell 3%.

But Singer has somewhat of a penchant for litigation, the NYP notes. In the past, it has sued corporations, former partners and even countries. "The threat of litigation is not unusual for Paul Singer," one investor told the paper.

Meanwhile, Shire's leaders have reverted to their pre-AbbVie mantra, touting their plan to double the company's sales to $10 billion by 2020. Recent third-quarter results suggested they're heading in the right direction, with sales jumping 33% to hit $1.55 million for the quarter.

AbbVie CEO Richard Gonzalez

As for AbbVie, which blamed stricter U.S. tax rules for abandoning the Shire buyout, it doesn't have any other megadeals up its sleeve--at least for now, CEO Richard Gonzalez said on a call with investors last week. "It's unlikely we would do another $50 billion deal," he said.

But if the right target comes along? "We clearly have the wherewithal to be active on the M&A front," he said. "We're going to continue to look for those opportunities that strategically fit and give us a strong financial return, and we'll deploy our capital accordingly."

- read the New York Post story

Special Reports: Top 15 highest-paid biopharma CEOs of 2013 - Richard Gonzalez, AbbVie | Pharma's top 10 M&A deals of 2014's first half

Suggested Articles

Turns out Procter & Gamble didn’t want Pfizer’s consumer health unit after all. But it did want Merck KGaA’s.

Private equity firm, in exclusive talks with Sanofi, says it'll invest to pump up Zentiva into an "independent European generics leader."

With suitor Takeda circling Shire, the Dublin-based target has pulled off a deal of its own.