Dallas, Texas 04/29/2014 (ustradevoice) – After being refused earlier for takeover negotiations, Allergan, Inc. (NYSE:AGN) decides to go forward for a more serious takeover talks with Shire PLC (ADR) (NASDAQ:SHPG), as per the Reuter’s report. Allergan, renowned as a Botox maker, is strongly in a lookout to acquire Shire in order to prevent itself from a hostile takeover bid by Valeant Pharmaceuticals Intl Inc (NYSE:VRX).
Second Time Offer
Allergan, Inc. (NYSE:AGN) currently has a market capitalization of close to $50 billion and, therefore, if it acquires Shire then it could remain independent. The company had entered into talks with Shire earlier but was being rebuffed. However, since the U.S. dermatology drugmaker has received a $47 billion acquisition offer from Valeant joined by activist investor Bill Ackman, it has spearheaded its efforts to acquire $32 billion worth Shire, an Irish drugmaker. As per the people familiar with the matter, Allergan could soon raise a fresh bid within the next couple of days. The plan is still to be finalized and, therefore, remains susceptible to change under certain circumstances, the Reuter’s report added. The representatives of both Shire could not be reached for a comment, while Allergan’s representatives refused to give out details.
Shire Deal Could Save Allergan
If Allergan successfully acquires Shire then the deal will lead to the creation of a pharmaceutical giant valued at more than $72 billion in terms of market capitalization and sales of over $11 billion. Moreover, Allergan would benefit from inversion; a process wherein the U.S. drugmakers are benefited by lower corporate tax through shifting of their headquarters in other countries. At present, Ireland has become a place of choice for the U.S. pharmaceuticals due to a lower tax slab of 12.5% as against 35% currently prevalent in the United States.
Then again, it remains unclear if Shire would openly accept AAllergan, Inc. (NYSE:AGN) ’s offer this time. It is to be noted that Shire itself is indulged in acquisitions, which includes the $4.2 billion takeover of ViroPharma Inc., aimed at decreasing its reliance on Vyvanse.