AbbVie, in its pursuit of drugmaker Shire, has hired some of the same advisers that Pfizer worked with in its failed push for AstraZeneca.
Richard Gonzalez, AbbVie's chief executive officer, yesterday made clear that a hostile bid is an option for his company.
AbbVie’s effort also differs in that it’s appealing directly to Shire shareholders early, offering what it calls a significant premium to win their support to pressure its board or prepare the ground for a hostile offer, according to people familiar with the matter.
This year’s boom in health-care takeovers is giving companies and their banks, lawyers, and public-relations firms plenty of real-life experience to draw upon.
AbbVie is being advised on its $46.5 billion bid by JPMorgan Chase as well as PR firm Brunswick Group, both of which also worked with Pfizer on AstraZeneca.
“They don’t want to back themselves into a corner,” Navid Malik, an analyst at Cenkos Securities in London, said of AbbVie.
Mr Gonzalez’s team is trying to keep debate focused on the strategic logic of a deal, rather than on using Shire’s Irish legal domicile to escape US taxes - a topic that came to dominate the Pfizer-AstraZeneca transaction, said one of the people, who asked not to be identified because talks are private.
However, they’re also stressing that tax benefits could enable bigger payouts to investors in the future.
The pitch: that a combination would enrich Shire shareholders beyond what the company could achieve alone.
Shire, for its part, has said the bid undervalues the company, and that it has strong prospects on its own. A spokeswoman for AbbVie and a spokesman for Brunswick didn’t immediately return calls seeking comment.
A JPMorgan spokeswoman declined to comment. Illinois-based AbbVie heads into possible negotiations with advantages Pfizer lacked. Unlike AstraZeneca, Shire doesn’t have a large workforce or substantial research base in the UK that politicians will fight to keep under local control, as they did in AstraZeneca’s case.
Shire, domiciled in Dublin for tax purposes and with management offices in Basingstoke, England, has rejected three takeover offers from AbbVie.
The companies are at odds over how to benchmark Shire’s shares, with AbbVie arguing Shire’s share price has been inflated since the AstraZeneca deal highlighted the attractiveness of UK and Irish-domiciled health-care companies.
Bloomberg
