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AbbVie Inc. share price down, edging closer to an acquisition of Shire Plc

Shire Plc said in a Monday statement that it would allow a takeover by AbbVie Inc., for an updated and improved bid of 31.4 billion pounds ($53.7 billion), after three failed earlier attempts.

The US company has moved towards acquiring the UK-based Shire, in a bid to relocate its HQ to the UK, where tax benefits would save the combined companys tax rate to 13%, down from 22% as of now, Bloomberg reported.

Shire Plc explained in its statement that it is now in detailed negotiations with AbbVie, after last weeks meeting between managers of the two pharmaceutical companies.

“The board of Shire has indicated to AbbVie that it would be willing to recommend an offer at the level of the revised proposal to Shire shareholders subject to satisfactory resolution of the other terms of the offer,” Shire said in its statement, cited by the Financial Times.

According to the statement of Shire Plc, it would recommend an offer of 53.20 pounds per share, which is 9.2% on top of the closing price of Shire on July 11th. Under the terms of the latest bid, the shareholders of Shire would own about 25% of the combined company. Currently, the negotiations between the two firms are still on the agenda, but closing of the eventual deal is still not certain.

AbbVie Inc. was 1.49% down to close at 54.96 dollars per share on Friday, marking a one-year change of +22.00%. According to information published on CNN Money, the 8 analysts offering 12-month price forecasts for AbbVie Inc. have a median target of 61.00, with a high estimate of 69.00 and a low estimate of 50.00. The median estimate represents a +10.99% increase from the last price of 54.96.

Shire Plc added 0.88% to trade at 4913 pence per share by 12:19 GMT, marking a one year change of +119.80%.

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