Shire acquisition of NPS on ice as AbbVie offer period ‘hamstrings’ company
Shire (LSE: SHP)’s attempt to acquire Bedminster, New Jersey-based NPS Pharmaceuticals (NASDAQ: NPSP) has been scuppered by AbbVie (NYSE: ABBV), at least temporarily, The Sunday Telegraph reported. According to an individual close to Shire, the Ireland-headquartered drugs group has historically been acquisitive and is currently “hamstrung” as it is being prevented from following its usual practice, a situation the source described as disruptive.
The report explained that Chicago-based AbbVie’s announcement of its GBP 27bn (EUR 34bn) takeover approach to Shire earlier this month launched a 28-day offer period during which Shire is prevented by UK takeover rules from making acquisitions which might be considered a “frustrating action”. It would be possible for Shire to convene an emergency shareholder meeting to secure approval for the NPS acquisition, but this would be dependent upon persuading Shire investors that the NPS deal would be more beneficial than Shire being taken over, the report said. It noted that Shire chief executive Flemming Ornskov has stated that he would not oppose a higher takeover bid from AbbVie, having already rejected three AbbVie offers.
Meanwhile, The Sunday Times reported that AbbVie Chief Executive Rick Gonzalez is flying to the UK for meetings with Shire investors this week, in the hope of persuading them to back a deal. Once the shareholders have been canvassed, bankers believe AbbVie will increase its offer above GBP 50 per share, the report said.
AbbVie has until 18 July to launch a formal fully-funded offer for Shire or abandon the deal, the Telegraph report noted.
Source Sunday Telegraph, Sunday Times