AbbVie comes up with higher offer for Shire of $51.5 billion

As has been widely expected following the meetings last week with major shareholders of Ireland headquartered Shire (LSE: SHP), US drugmaker AbbVie (NYSE: ABBV) has today outlined its revised proposal of £22.44 in cash and 0.8568 ordinary shares of New AbbVie for each Shire share, or worth £30.1 billion ($51.5 billion).

Shire responded swiftly with a brief statement saying it confirms that AbbVie did not make the revised proposal to Shire before the announcement.The board of Shire will meet to consider the proposal and a further announcement will be made in due course. Meantime, it said, shareholders are "strongly advised" to take no action regarding AbbVie's new proposal.

Shire’s shares edged up just 1.3% to £47.13 by 1 pm in London trading. However, by the end of business on Tuesday, the stock was down 2% at £45.58. While AbbVie’s desire to get this deal done quickly is clear, noted analysts at EP Vantage, many investors apparently believe it will never happen.

Shire likely to feel pressure to enter formal talks, says analyst

Mick Cooper, an analyst at Edison Investment Research, commented: “AbbVie’s revised offer has been raised sufficiently to interest a sizeable fraction of Shire’s investor base, suggesting management will feel pressured to now enter into formal discussions.”