The £51.15 a share offer represents an 11 per cent increase on the £46.26 proposal made last month, which Shire said “fundamentally undervalued” the company.
Richard Gonzalez, AbbVie’s chief executive, told the Financial Times on Tuesday he felt there was broad shareholder support for a deal after talks with big Shire investors in London and New York over the past week.
“We have met with the majority of shareholders, they understand the strategic rational. I believe they are generally supportive of this transaction and this offer is indicative of those discussions.”
Shire, which makes speciality drugs for rare diseases and neurological disorders, said it had not been informed of the new offer in advance and that its board would meet to consider the proposal.
It is the second FTSE 100 drugmaker to face an unsolicited takeover bid from a US rival this year, with AbbVie trying to avoid the fate of Pfizer, which failed to buy AstraZeneca for £69.4bn earlier this year.
Like Pfizer, AbbVie is motivated in part by potential savings from a plan to establish the merged company’s tax domicile in the UK as a way to shield offshore cash from higher US rates.
AbbVie’s bid is less controversial because Shire lacks the large UK workforce and research and development base that roused political opposition to the AstraZeneca deal.
However, a takeover of Shire, whose market capitalisation exceeds that of household names such as Tesco and Rolls-Royce, would remove one of the fastest-growing FTSE 100 companies from the UK investment landscape.
Jeffrey Holford, analyst at Jefferies, said the increased offer was close to “the tipping point” at which Shire would be coaxed into talks but predicted AbbVie would have to get closer to £55 a share to clinch a deal.
Ronny Gal at Bernstein predicted Shire would reject the latest bid but agree to enter negotiations, adding that the acquisition was likely to go through eventually.
Tuesday’s proposal was made up of £22.44 in cash and 0.8568 AbbVie shares for each Shire share – roughly the same 44 per cent cash proportion as in the earlier proposal.
Mr Gonzalez declined to rule out a higher offer or the possibility of taking the bid direct to shareholders if Shire’s board refused to negotiate. AbbVie has until July 18 under UK takeover rules to make a firm offer or walk away.
Analysts and bankers said a hostile bid was a more realistic possibility than it was for Pfizer in its pursuit of AstraZeneca because, with few overlapping businesses or potential cost synergies, AbbVie has less need to see Shire’s books.
The US company said its latest proposal represented a 75 per cent premium over Shire’s share price in mid-April before takeover speculation intensified, although the UK-listed company disputes that this should be the reference point.
Shire’s defence is being spearheaded by Susan Kilsby, the former Credit Suisse investment banker who took over as chairman of the drugmaker in April.
The company’s double-digit sales growth has long marked it out as an attractive potential target for bigger rivals and one shareholder speculated that the company could seek to draw other bidders, such as big US biotech groups, into an auction.
Shares in Shire fell more than 3 per cent to £44.96, reflecting uncertainty over the prospects of a takeover. A 2.8 per cent drop in AbbVie’s stock to $55.81 was another factor, reducing the value of the paper portion of any deal with the US company.
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