AbbVie Raises Offer 11% to £51.15/shr (£22.44 in cash and 0.8568 in stock) from £46.26/shr prior
Following the announcement on June 25, 2014, where AbbVie outlined its strong strategic rationale and commitment regarding a combination with Shire, AbbVie and its financial adviser have met with, or spoken to, a large number of Shire shareholders, who collectively represent a majority of Shire's outstanding shares. The majority of these shareholders are longer-term holders of Shire, including the majority of Shire's largest shareholders. Today, AbbVie is pleased to outline its revised proposal of £22.44 in cash and 0.8568 ordinary shares of New AbbVie for each Shire share. The Fourth Proposal represents an indicative value of £51.151 as of July 7, 2014.
The indicative value of the proposal represents an increase of approximately 11 percent and approximately a £3 billion increase to the indicative offer value of £46.26[5] per share; an increase of £2.00 and approximately 10 percent in cash per Shire share; a premium of 75 percent to Shire's closing share price of £29.25 on April 17, 2014 and approximately £13 billion of incremental aggregate value for Shire's shareholders; a premium of 48 percent to Shire's closing share price of £34.67 on May 2, 2014 (the last practicable date prior to AbbVie's initial proposal) and approximately £10 billion of incremental aggregate value for Shire's shareholders; and an implied Enterprise Value / Last Twelve Months' EBITDA (as reported by Shire) multiple of approximately 25x.
In addition, this revised indicative proposal increases the ownership that will be held by Shire shareholders to approximately 24 percent of a new holding company of the combined group. For reasons that AbbVie outlined in previous announcements, presentations and press releases from June 25, 2014, AbbVie continues to believe that AbbVie's attractive stock has meaningful upside potential independent of a transaction, and New AbbVie's share price would be well-positioned to appreciate and re-rate.
AbbVie Chairman and CEO Richard Gonzalez: "This transaction is a combination of two leading companies with leadership positions in specialty pharmaceuticals that would create a global market leader with unique characteristics and a compelling investment thesis. AbbVie will bring greater financial strength and R&D experience to this combination that will enable both companies to reach their full potential for their shareholders and patients in need across the globe. AbbVie has made a compelling offer to Shire that creates immediate and long-term value to shareholders of both companies. We think its shareholders should strongly encourage the Shire board to engage in constructive dialogue with AbbVie."'
