The chief executive of AbbVie has urged Shire shareholders to press the FTSE 100 pharmaceutical group to engage with the US company regarding its £27bn takeover approach.
AbbVie’s Richard Gonzalez flew back to his company’s Chicago headquarters this week after telling large Shire shareholders that AbbVie would like to see the UK company’s books before it would consider making an improved offer, according to people in attendance.
The meetings in London this week came after Shire, which focuses on treatments for rare diseases and neurological disorders, rejected three separate proposals from AbbVie beginning in early May. It has said that AbbVie’s latest £46.26 a share offer “fundamentally undervalued” the company.
Shire indicated to the Financial Times on Wednesday that it was up to AbbVie to make the next move. “Shire has made its position very clear and the ball is firmly in Abbvie’s court,” the company said.
One investor who met Mr Gonzalez said Shire would be reluctant to open its books to AbbVie in the absence of an increased offer because, under UK takeover rules, it would then be obliged to do the same for any other interested parties.
Analysts have speculated that rival US bidders could emerge, attracted by the prospect of using Shire as a vehicle to shelter offshore cash from high US corporate tax rates – a manoeuvre known as a tax inversion.
The investor who met Mr Gonzalez said it was unclear whether AbbVie was categorically ruling out a higher bid in the absence of talks or simply trying to manage market expectations and increase pressure on Shire.
Mr Gonzalez told investors that Shire’s forecast of doubling annual revenues to $10bn by 2020 was too vague.
He added that he had met Susan Kilsby, Shire chairman, in Geneva for one hour after the company made its first informal offer of £39.50 a share in early May. Shire’s board rejected a second offer at £40.97 on May 20 without a meeting between the two sides.
After making a third offer worth £46.26 a share, Mr Gonzalez met for nearly two hours with Ms Kilsby in Paris. A few hours later, Mr Gonzalez was told the third offer had been rejected. AbbVie declined to comment.
The US company’s latest offer represents a 23 per cent premium over Shire’s share price the day before its interest became public. However, AbbVie highlighted the 58 per cent premium over the price in mid-April, before news of Pfizer’s interest in AstraZeneca caused takeover speculation surrounding Shire to intensify.
Analysts and bankers have predicted that AbbVie will increase its offer, while people close to the company have said that it would “remain disciplined” on price. AbbVie has not ruled out going hostile with its approach.