Shire rejects AbbVie bids

Shire plc (LSE:SHP; NASDAQ:SHPG) gained $31.18 (16%) to $222.89 on NASDAQ and was up 633p (17%) to 4,371p in London on Friday after disclosing its board rejected an unsolicited offer from AbbVie Inc. (NYSE:ABBV) to acquire Shire. The price valued Shire for about L27.7 billion ($47 billion) in cash and stock based on AbbVie's close of $54.03 on May 29, before AbbVie made the offer. The companies disclosed that the bid follows two rejected offers earlier in May which valued Shire at L23.6 billion ($39.9 billion) and L24.5 billion ($41.3 billion), respectively. Shire said the combined company would be a U.S. holding company with a U.K. tax domicile. Shire said the latest offer "fundamentally undervalued the company and its prospects" and its board was concerned with the "execution risks" of AbbVie's redomiciling in the U.K. The latest offer comprises L20.44 in cash and 0.7988 AbbVie shares per Shire share.

Under U.K. takeover rules, AbbVie's proposal will expire on July 18. Shire advised shareholders to take no action on the proposal. Citi; Evercore and Morgan Stanley are advising Shire. JPMorgan is advising AbbVie. ...