Shire finally comes to AbbVie's buyout table, thanks to $53B-plus bid

Look who's talking. After four takeover bids from AbbVie ($ABBV), target Shire ($SHPG) is finally in discussions with the Illinois drugmaker. And those have yielded yet another improved offer--a $53.7 billion bid Shire says its board would back.

AbbVie's latest proposal comprises cash and stock equal to about £53.20 per share, tallying more than £31 billion, or about $53.7 billion. That's a "fair price that represents good value for both companies' shareholders," Edison Investment Research analyst Mick Cooper told The Globe and Mail. But the companies still have to work out some other terms before sealing the deal, the Irish drugmaker said Monday.

"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," Shire said in a statement. "Accordingly, the board is in detailed discussions with AbbVie in relation to these terms."

AbbVie's latest proposal--which Shire says it requested--marks an improvement on the $51.5 billion it offered up last week. The sweetened bid came after officials from each company met in New York Friday, according to The New York Times.

From here, things should be "pretty straightforward," Berenberg Bank analyst Alistair Campbell told Bloomberg. "I think we are almost there," he said. "Due diligence should be done and a deal is going to be done pretty much at this level."

For AbbVie, a Shire buyout would diversify its portfolio beyond its top seller, Humira, which currently hauls in more than half the company's revenue. It would slice its tax rate by about 9%, too. Moving its official domicile to the U.K. would take AbbVie's rate to 13% from 22%, saving an estimated $1.3 billion by 2020. Most of that savings would materialize within the first two years after a merger, Barclays analysts told The Globe.

Shire CEO Flemming Ornskov

While Shire CEO Flemming Ornskov had touted more-than-doubled sales predictions for 2020 by way of staying independent, he's also said he couldn't ignore AbbVie's offer if the price was right. And despite rumors that Allergan ($AGN)--desperate to dodge its own $53 billion takeover bid from Valeant--would make a play for Shire, it looks as if AbbVie will be the only one, UBS analyst Guillaume van Renterghem told Bloomberg.

"I don't think that Shire either has found or is willing to find a white knight," van Renterghem said by phone today. "If nobody has come now, I think it's unlikely that anybody will come."

- read the release
- get more from The Globe and Mail
- see Bloomberg's take

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