Shire Offers $30 Billion for Baxter Spinoff
Dublin-based pharmaceutical group Shire said today it had bid Dollars 30 billion (27 billion euros) for US rival Baxalta to form a global biotech company focused on rare diseases. Shire said its unsolicited all-share offer valued each Baxalta share at $45.23, based on August. 3 market prices.
However, a Baxalta spokesman wasn’t immediately available to comment.
Shire’s lead product is the attention deficit hyperactivity disorder drug Vyvanse and sales rose 18 percent to $424.8 million during the most recent quarter.
It has 16,000 employees in more than 100 countries and posted revenue of $6 billion in 2014.
“Together, the companies would be projected to deliver $20 billion in product sales by 2020, with the financial and operational firepower to fuel further innovation and growth in rare diseases”.
As Shire ($SHPG) announced on Tuesday, it put forth a bid of about $30 billion for the Illinois pharma on July 10-just 9 days after Baxalta went solo-and now it’s taking the offer to shareholders to spur the company to the bargaining table. Shire’s Chief Executive Flemming Ornskov said he had gone public with the company’s plan to acquire Baxalta after Baxalta’s board declined to engage in substantive discussions. Baxalta shareholders would own about 37 percent of the combined company following the transaction, Shire said.
“Your lack of engagement has been surprising”, Ornskov said in a letter to his counterpart at Baxalta, Ludwig N. Hantson.
AbbVie, a U.S. drug maker, walked away from a deal north of $50 billion to purchase Shire last year, after the Obama administration released new rules meant to make the offshore tax deals known as inversions less attractive. “We believe they deserve an opportunity to consider it”. Applying those rates, often in the midteens, to profits of companies in the U.S., with a federal corporate rate of 35%, can yield extra savings on top of those traditionally wrung from mergers.
Shire is offering 14.5x 2015 EV/EBITDA for Baxalta.