) continues to pursue
) and has now come up with a fourth proposal. In its latest
proposal, AbbVie has increased the bid to approximately £51.151
per Shire share (£22.44 in cash and 0.8568 ordinary shares of the
merged company for each Shire share). We note that Shire has not
rejected the offer outright. Instead, the company announced that
its board will meet to consider the proposal.
The new proposal represents an approximate 11% increase over
the preceding bid, which comprised £20.44 in cash and 0.7988
AbbVie shares per Shire share held, representing a value of
£46.11 per share of Shire. Shire had promptly rejected the third
acquisition proposal from AbbVie.
Both AbbVie and Shire shares fell 2.98% and 1.92% on the
What's in the New Proposal?
AbbVie believes that the latest proposal will bring long-term
value for all shareholders. Shire shareholders holding
approximately 24% ownership in the post-merger entity will enjoy
more of the synergies and value creation from the
AbbVie expects the proposed combination to be accretive to
earnings and enable a competitive tax structure. AbbVie intends
to form a new listed holding company in the U.S. post acquisition
with a UK tax domicile.
We remind investors that earlier this year,
) was actively pursuing
) primarily motivated by potential tax benefits. However, the
Pfizer-AstraZeneca deal did not go through.
We believe that investor focus will remain on further updates
from Shire regarding the AbbVie bid.
AbbVie and Shire currently carry a Zacks Rank #3 (Hold).
AstraZeneca is a better-ranked stock in the health care sector
holding a Zacks Rank #2 (Buy).
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