Shire PLC (ADR) (NASDAQ:SHPG) Rejects $47 Billion Takeover Offer, But More To Come

Boston, MA 06/23/2014 (wallstreetpr) – Shire PLC (ADR) (NASDAQ:SHPG), a $44 billion specialty biopharmaceutical company based in Ireland, rejected at least three takeover offers from AbbVie Inc (NYSE:ABBV).

The company declined $46.5 billion purchase offer as its board of directors said the proposal undervalues the company’s prospects. Furthermore, the board said the proposal was “highly conditional.” Nonetheless, sources say that AbbVie Inc is not ready quit its pursuit of Shire.

As such, it is expected to make another offer for the fourth time. Sources also say AbbVie may seek to engage shareholders of Shire PLC (ADR) (NASDAQ:SHPG) directly. However, Shire has asked its shareholders to take no action of the matter.

AbbVie was recently separated from Abbott Laboratories (NYSE:ABT).

Lower tax environment

If AbbVie is successful in a deal with Shire, it will gain access to a growing portfolio of table treatments that target rare diseases. The move may also make it easy for AbbVie to move its illegal corporate headquarters from the U.S. to Ireland where corporate tax rates are much lower compared with the U.S.

Several U.S. companies are seeking to reincorporate outside the country citing the 35 percent corporate tax rate as prohibitive. The maneuvers to reincorporate abroad allow the company to reduce their tax burn and return bigger value to shareholders. Moreover, domiciling abroad allows U.S. companies to put their profits in foreign accounts without incurring steep taxes on the same.

Better alone

According to the board of directors of Shire PLC (ADR) (NASDAQ:SHPG), the company is better off as an independent entity. First and foremost, Chairman Susan Kilsby said a statement that the company has a good track record in delivering shareholder value. Additionally, based on its high-performing management, efficient cost base, expanded portfolio and an enhanced pipeline, the board believes that the company has a strong independent future.

Shire PLC (ADR) (NASDAQ:SHPG) generates about 41 percent of its revenue from three of its drugs targeted at the treatment of attention deficit disorder. One of the drugs is Vyvanse.

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email ( or his Google+ page (

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