Shire share price leaps by more than 500p on AbbVie approach

Peter Spence
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Shire shares rose by more than 14pc in early trading (Source: Getty)

London-listed pharma company Shire has turned its nose up at an approach from AbbVie. A statement from AbbVie released this morning confirms that bids were knocked back three times.

AbbVie, a Chicago based company, first offered an initial cash and share proposal in early May, valuing Shire at around £39.50 per share.

By their third and final proposal, which was also rejected, their approach represented an indicative offer of £46.26 for each Shire share.

Analysts at Jefferies suggest that there would have been limited product portfolio synergies as the result of a merger, and as a result assume that potential cost savings, tax benefits, and diversification motivated the approach.

A Shire acquisition would likely see AbbVie meet tax inversion criteria, with 20 per cent or more of the combined entities' shareholders being non-US. AbbVie could then benefit from Shire’s favourable tax position and Irish domicile.

At pixel time, Shire shares were more than 14 per cent higher, trading at around £42.72.