Shires share price was the biggest riser when the FTSE 100 reopened this morning, with expectation that Abbvie are about to make an improved offer.
The share prices of Shire has risen as hopes that US company Abbvie will raise its £27bn takeover offer, this comes after Shire said it would us a £146m cash rebate from the Canadian tax man to reduce the debt of the company.
Shire who are based in Ireland are looking to convince their shareholders of its long term prospects. By paying off some of their debt the pharmaceutical company would be able to increase capacity to invest in focused business development activities.
Shires share price opened at £46.54 up 1.86%, this also made it the biggest riser in the FTSE 100 when the market opened this morning. This could be due to reports that AbbVie are looking to increase their takeover offer with high level meetings anticipated between AbbVie Chief Executive Rick Gonzales and Shire’s biggest investors.
Shire has already rejected three offers from Abbvie, with the last valuing the company at £46.11 a share or £27bn. However analysts are divided on actually how much AbbVie will actually have to raise its offer by. There has been estimates that range from between £55 and £62 a share. Although it is thought that an offer of over £50 could be enough to prompt Shire’s board to engage.
The top 10 shareholders of Shire combined control a third of the company, with the biggest investor BlackRock holding around 8%. In the grand scheme of things AbbVie will need a minimum of 50% of shareholder to an offer or 75% if it wanted a full takeover.
Mr Gonzalez needs to convince Shire’s shareholders of AbbVie’s marketing clout, financial strength and pipeline prospects, as they would end up owning shares in the enlarged group. In the meantime Shire’s attempts to acquire a rival pharmaceutical company NPS Pharmaceuticals who are based in the US has been scuppered due to AbbVie’s advances.