On the latest news on AbbVie Inc. (NYSE:ABBV), CNBC‘s David Faber reported about the recent raising of the takeover offer by AbbVie Inc. (NYSE:ABBV) for Shire PLC (ADR) (NASDAQ:SHPG).
Faber said that the AbbVie takeover bid comes just after Pfizer Inc. (NYSE:PFE)’s failed attempt last month to takeover AstraZeneca PLC (ADR) (NYSE:AZN). Pfizer’s attempts failed after AstraZeneca declined its offer. Moreover, the deal had attracted the attention of U.S. lawmakers, for attempt to save on taxes through the deal.
The latest takeover offer amounts to 51.15 pounds a share and is higher than the previous offer of 46.26 pounds. The previous offer, according to Shire PLC (ADR) (NASDAQ:SHPG), fundamentally undervalued the company.
“Perhaps coloring this deal a bit, but the execution here at least has been fairly good I would argue from the AbbVie point of view. They come yet again with a higher bid. They have increased the cash now by 9.8%, the stock component up by 7%, they also had a bit of an increase in AbbVie stock which has brought the overall value of the deal up now by 11 %. They are at 22.44; that’s pounds and cash, and they also increased the stock portion to 0.8568 ordinary shares of AbbVie,” Faber said.
“There is another inversion, of course, in which they would of course take the tax rate of the domicile in the U.K. It’s not about what they pay in taxes here in the U.S., remember, it’s what you earn in the U.S. is still going to be taxed regardless of where you are in the territorial system. It’s all about earnings overseas and being able to repatriate them to the U.S. or particularly in the U.S. and not have to pay those U.S. taxes,” he added.
Faber also mentioned that July 18, is the deadline for the both the companies to decide on the offer or maybe AbbVie would choose to go for a hostile bid.