Spurned Shire preps new takeover offer for longtime target Baxalta

Shire CEO Flemming Ornskov

Last month, Shire ($SHPG) said it still believed an acquisition for Baxalta ($BXLT)--a target that rejected it almost four months back--would make a "highly strategic combination." And now, it's preparing to follow up.

The Dublin drugmaker is readying a new takeover proposal for the Illinois-based pharma, Reuters reports. Shire has asked its advisers--Morgan Stanley, Evercore and Deutsche Bank--to revive its effort to snag the company, which called its previous offer of $30 billion a "lowball" valuation.

According to the news service's source, Shire CEO Flemming Ornskov has not quit on chasing a Baxalta tie-up over the past 6 months, despite the company's refusal to engage in deal talks. And he's been clear with investors about his unwavering commitment, too; when Shire agreed to pick up rare-disease drugmaker Dyax for $5.9 billion a few weeks back, he pointed out in a statement that "we will continue to have the financial firepower to pursue other value-added strategic acquisitions, including Baxalta."

But the Baxter spinoff has its reasons for snubbing Shire, and some of them won't be going away even with a sweetened offer.

For one, CEO Ludwig Hantson told investors this summer, Baxalta is a brand-new company that hasn't had time to see its growth strategy play out.

And for two, the company doesn't think joining forces would be all that complementary. While Shire has said hooking up would create a global leader in rare diseases, in Hantson's view, the drugmakers' portfolios are too dissimilar to wring out any cost savings.

"We do not think the combination would generate substantial operational or revenue synergies, which would be critical to any potential value creation," he wrote in August.

And mounting a hostile takeover battle won't be easy for Shire if it chooses to go that route, Reuters notes. Baxalta's defenses include a poison pill plan that stymies suitors trying to build a stake past 10%.

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Special Report: The 25 most influential people in biopharma in 2015 - Flemming Ornskov - Shire

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