Shire said to enlist help fighting off unwanted takeover

Shire CEO Flemming Ornskov

First it was Warner Chilcott, then it was Elan. Now, a report says Shire ($SHPG) may be the next Irish company targeted for acquisition--and the company has brought on a financial adviser, apparently to hold off unwanted bidders.

As U.K. paper The Sunday Times reported, Shire has hired investment bank Lazard to defend it against a possible takeover. Interest in Shire is nothing new: In March, the company reportedly received advances from Bristol-Myers Squibb ($BMY), and in May the word was that an £11 billion hostile bid was on the way.

There's good reason for the buyout buzz around Shire. In addition to its ADHD drug empire, the company also boasts a growing rare disease business. Since CEO Flemming Ornskov took over earlier this year, he has been making deals to supplement Shire's pipeline in that area, snatching up biotechs like Swedish Premacure AB and Cambridge, MA-based startup Nimbus Discovery. And Shire recently turned around disappointing first-quarter financial results with a 7% revenue increase and an 8.5% earnings boost in the second quarter.

So is a bidder in the wings now? Possibly. But Shire could simply be growing wary because of the recent flurry of Irish deals. Companies are eager for access to Ireland's favorable tax structure, making the country's own companies attractive for takeover. Both Perrigo, which recently purchased Elan ($ELN), and Actavis ($ACT), which made a deal for Warner Chilcott ($WCRX) in May, cited Ireland's tax regime as a factor.

Whatever the reason for the Lazard hire, Ornskov has been clear that he is not seeking a takeover, stressing that Shire is looking to remain the acquirer rather than the acquired. Ornskov has also decided not to extend a share-buyback program, PharmaTimes says, suggesting the company may be looking to use the extra cash on hand for its own dealmaking.

- read the Sunday Times piece (sub. req.)
- get more from PharmaTimes
- see PMLiVE's take

Special Reports: Angus Russell - 20 Highest-Paid Biopharma CEOs of 2012 | Buyout Buzz: The most frequently cited takeover targets in biotech

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