Many a U.S. pharma company has already completed an Irish tax inversion, picking up and moving overseas to take advantage of that country's lower rate. But plenty more are out there looking to follow suit--whether or not their targets like it. So what's a mid-sized Dublin-based drugmaker to do? Hire an adviser, if you're Shire.
The company ($SHPG) has brought on investment bank Citi as it braces for takeover approaches, Reuters reports, with sources telling the news service "something could happen this year."
That's hardly a surprise for those who have followed the company over the past few years. With a market value of about $35 billion, Shire has a growing stable of rare-disease drugs in addition to its Irish address--and it continually appears on the list of prime buyout candidates. Pharma-sector bankers say Shire could draw interest from the likes of Bristol-Myers Squibb ($BMY), Amgen ($AMGN), AbbVie ($ABBV), Gilead ($GILD) and Biogen Idec ($BIIB), Reuters notes.
And while the company may have been down this road before--last year, it reportedly enlisted help defending against potential hostile bids--this time, the stakes may be higher for wannabe acquirers. Pharma's deal wave has left some in a "hunt or be hunted" predicament--like Allergan ($AGN), which, eager to ward off Valeant's ($VRX) unwanted advances, reportedly considered a second play for Shire in April after suffering an earlier rejection.
Shire itself may already be in such a position, analysts have said, suggesting the company bulk up--and quickly--if it wants to keep flying solo.
"If they want to stay independent, then going on a bit of a shopping spree makes it harder for another entity to go after them," Piper Jaffray analyst David Amsellem told Bloomberg earlier this month. "They will be approached. They probably have been approached."
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