Shire share price: AbbVie boss to court shareholders in London
iNVEZZ.com, Monday, June 30: AbbVie Inc’s (NYSE:ABBV) boss Richard Gonzalez will fly to London to convince Shire’s (LON:SHP) shareholders of the benefits of a merger between the two companies, the Financial Times has reported. While the Dublin-based drugmaker has already rejected three offers, AbbVie is expected to sweeten the bid once it has a better sense on valuation from investors.
Shire’s share price has climbed just under two percent to 4,661.05p in London this morning.
**AbbVie boss flying to London**
The FT yesterday reported that AbbVie’s chief executive was due to fly to London this week where he would hold talks with Shire investors in an attempt to increase pressure on the biopharma company’s board to enter negotiations.
AbbVie has already had three offers snubbed by Shire’s board with the last bid valuing the rare disease specialist at £46.11 per share, or £27 billion. Reuters reports that Barclays analysts have said that the US drugmaker could pay up to £55 per share for Shire, while Bank of America Merrill Lynch sees AbbVie going as high as £62. Unnamed sources close to AbbVie, however, told the FT that the company would remain ‘disciplined’ on the potential price. Under UK takeover rules, AbbVie has until July 18 to either make a firm offer or walk away.
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AbbVie last week set out the merits of a tie-up with Shire, noting that the proposed combination was ‘strategically compelling’. (Shire share price: AbbVie outlines benefits of tie-up) The US group has pointed to the tax benefits of a merger with the combined company to be incorporated in Jersey and have a UK tax domicile.
The Times reports that AbbVie’s chief executive is expected to tell Shire’s shareholders that the ‘tax inversion’ ploy is not the principal reason for the deal and present them with a growth plan to improve the UK company’s drug pipeline.
Shire outlined its defence against AbbVie’s merger proposal last week, mirroring a move by FTSE 100 peer AstraZeneca (LON:AZN), which recently rebuffed a takeover approach from Pfizer (NYSE:PFE). (Shire share price: Company takes leaf out of AstraZeneca’s playbook) The Dublin-based company has promised to double its annual sales to $10 billion (£6 billion) by 2020, with $3 billion expected to come from drugs still in the group’s pipeline.
Shire’s chief executive Flemming Ornskov, however, has signalled that he is open to a takeover at the right price.
“This is a premium asset and if someone wants to shorten the life of this company they will have to pay a price that reflects that,” the Dane recently said in an interview with the FT.
**As of 08:22 BST, buy Shire shares at 4665.00p.**
**As of 08:22 BST, sell Shire shares at 4663.00p.**