Shire PLC (ADR) (NASDAQ:SHPG) came up in the center of attention after refusing AbbVie Inc (NYSE:ABBV)‘s buyout bid. Reporter Catherine Boyle has been on CNBC recently and she discussed the defense of Shire PLC (ADR) (NASDAQ:SHPG) against AbbVie Inc (NYSE:ABBV)’s offer.
She was asked about the Shire PLC (ADR) (NASDAQ:SHPG) defense and how credible it would be. According to Boyle the defense is going to be pretty credible because of Shire’s “credible” management team, they had already built their essential portfolio, had their sales really bolstered. Then they went to pursue the orphan drugs, for small patient population diseases, actually those are the kind of diseases that you can get drugs approved more quickly. Boyle, however, said that they can count on patient population that could quite easily pursue the government to pay for that kind of thing.
They have had a successful strategy so far, shareholders who have bought them for the past few years enjoy that. Looking at the kind of prices that have been talked about for Shire PLC (ADR) (NASDAQ:SHPG) there has to be a huge premium included. It’s already a company that listed for 100 million pounds 18 years ago.
“This could finally be the point to which it (Shire PLC (ADR) (NASDAQ:SHPG)) loses it’s independence”
However, she considers that it’s the duty of management to make sure the shareholders get a good price. Boyle was asked if AbbVie Inc (NYSE:ABBV) would come back with a higher bid than the refused one, to which she answered that there was a lot in the market so the next bid would need to be even higher. There was a big premium of about 30%, but other companies were walking away from a 45% premium bid. She feels that the bid should be a much higher one that what’s being offered as there is a benefit of tax conversion and tax saving for AbbVie Inc (NYSE:ABBV).