Shire's board has indicated that it is ready to recommend AbbVie's latest offer to buy the company for £31bn.
The bid, which was made on Sunday, marks the American company's fifth attempt to buy the London-listed pharmaceutical firm, after four previous approaches were rejected.
The new offer is valued at £53 per share and would result in Shire investors owning 25 per cent of the new, combined firm. This is an increase from AbbVie's previous offer of £51 per share.
On the back of the news, Shire's share price went up by 2.7 per cent in early morning trading and hit a record high of £50.5 mid-morning. Shares are currently valued at £49.3.
In a statement, Shire said: “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. Accordingly, the Board is in detailed discussions with AbbVie in relation to these terms.”
On Saturday, Shire asked AbbVie to bring its offer up to close to £53 per share, so that it could recommend the deal. However, the board stressed that there "can be no certainty that any firm offer will be made".
Abbvie wants to buy Shire because it would result in a cut to its tax bill and an opportunity to diversify its product line-up.
The move comes after some large shareholders have been privately pushing for Shire to consider engaging with AbbVie.