Shire's revised offer accepted by Baxalta board

In a much anticipated announcement and a reversal of sentiment in a five-month pursuit, the board of director of the USA’s Baxalta (NYSE: BXLT) have reached an agreement under which Ireland-headquartered Shire (LSE: SHP) will acquire Baxalta under improved revised terms.

Baxalta’s shares moved up 5.47% to $42.20 in pre-market trading, but levelled off to $39.84 by mid-morning. Shire declined 6.6% to £39.94 by late afternoon UK trading. This is Shire’s latest focus on companies with treatments for rare diseases, which included the November purchase of Dyax for $5.9 billion and the $5 billion buy of NPS Pharmaceuticals

Under the revised offer from Shire, whose previous bids of around $30 billion in all stock were rejected (The Pharma Letters passim), Baxalta shareholders will receive $18.00 in cash and 0.1482 Shire ADS (American Depositary Shares) per Baxalta share. Based on Shire's closing ADS price on January 8, 2016, this implies a total current value of $45.57 per Baxalta share, representing an aggregate consideration of around $32 billion. The exchange ratio is based on Shire's 30-day trading day volume weighted average ADS price of $199.03 as of January 8, 2016, which implies a total value of $47.50 per Baxalta share.