Shire Rejects AbbVie's $46 Billion Offer

Shire announced last week that it rejected what it calls an" unsolicited and highly conditional proposal" from American drugmaker AbbVie, a company that spun off from Abbott Laboratories in 2013.

AbbVie has made two previous offers, which were also rejected, Shire reported in a company announcement. This latest acquisition offer was worth $46.3 Billion in cash and shares.

In a recent meeting, AbbVie took the opportunity to explain key aspects of the proposal, however, the Board of Shire voted unanimously to reject the proposal on the basis that it "fundamentally undervalued the Company and its prospects."  The company cited its accelerated growth and increased shareholder returns and product sales in the past 12 months. AbbVie's proposal would also deny Shire shareholders the full benefits of Shire’s growth strategy.

Shires board also had concerns regarding the execution risks, as Chicago-based AbbVie would redomicile in the UK for tax purposes and "effectively renounce its United States citizenship in a maneuver known as an inversion. Shire is based in Dublin, but is publicly traded in Britain," according to the New York Times.

British takeover rules will allow AbbVie a chance to firm up a proposal for Shire until July 18 - or it must walk away for at least six months before making another unsolicited offer. If Shire agrees to it, the two companies can resume discussions in three months.

 “Shire has a long track record of delivering for shareholders and addressing unmet patient needs," Susan Kilsby, Chairman of Shire, said. "Our high-performing management team and focused strategy are producing even stronger results, reflected in our recent top-line growth and increased profitability."