Updated, 2:06 p.m. |
Officials from the drug makers AbbVie and Shire met in New York on Friday to discuss a potential takeover of Shire, which had previously rejected AbbVie’s merger approaches.
Shire, which confirmed the meeting in a statement late Friday, did not provide details of the discussions. The talks follow AbbVie’s revised offer earlier this week to pay about $51 billion for Shire, which has its headquarters in Ireland and is listed in London
The talks are at an early stage and may not result in a combination of the two companies, according to the person familiar with the matter.
The deal, if consummated, would allow AbbVie to reincorporate in Britain and save millions of dollars in taxes, a process known as an inversion.
Bloomberg News reported the talks between the companies earlier on Friday.
AbbVie, based in Chicago, is hoping to reach a deal before July 18, when it will have to make a firm offer or walk away for up to six months under British takeover rules.
Shire has not commented publicly on the latest offer, other than to say that its board will meet to consider the proposal and to urge shareholders not to take any action regarding the revised bid.
The revised bid represents a 48 percent premium over Shire’s closing price of 34.67 pounds, or about $59.41, a share on May 2, the day before AbbVie’s first approach.
The offer came as American pharmaceutical and medical device makers rush to engage in inversions to save on their corporate taxes and free up money held outside the United States.
Since early May, AbbVie, which was spun off from Abbott Laboratories last year, has made four offers to Shire and the latest bid represents a particularly rich premium.
AbbVie and its financial adviser, JPMorgan Chase, have had a series of meetings with Shire’s shareholders since AbbVie publicly announced its intention to pursue Shire in June, including a trip by Richard A. Gonzalez, AbbVie’s chairman and chief executive, to London last week.
But AbbVie was forced to rein in its enthusiasm a bit earlier this week when it ran afoul of British takeover rules.
The drug maker retracted statements that Shire shareholders were supportive of the deal because it hadn’t received any written statements of support from investors.
“It acknowledges that in the absence of written statements of support from shareholders, it is not in a position to make any statement of shareholder support” under British takeover rules, the company said.
In its latest offer, AbbVie would pay £22.44 in cash and 0.8568 of an AbbVie share for each share of Shire, or about £51.15 a share. Shire’s shareholders would own about 24 percent of the combined company.
Shares of Shire closed up 5.9 percent at £48.70 in London on Friday.
Shire has said the previous offers by AbbVie significantly undervalued the drug maker and its prospects.