Look who's talking. After four takeover bids from AbbVie, target Shire is finally in discussions with the Illinois drugmaker. And those have yielded yet another improved offer--a $53.7 billion bid Shire says its board would back.
There's a whiff of inevitability with AbbVie's quest for Shire, as the latter company has confirmed that the two have found an agreeable price, setting the stage for a potential merger worth about $53.7 billion.
Mylan has been hunting for a buy. Now, it's found one. The Pittsburgh-based generics specialist is buying a big chunk of Abbott Laboratories' drug business, in a stock swap worth $5.3 billion. With $2 billion in annual sales, the products would jack up Mylan's top line by almost 30%.
With time running out for AbbVie to strike a deal with Shire before it will have to walk away for as long as 6 months under U.K. takeover law, the Illinois-based company is encouraging top Shire shareholders to push the Irish drugmaker toward the bargaining table.
Shire has refused to negotiate with a dogged AbbVie after four increasingly priced overtures, and now, with a $51.5 billion offer on the table, AbbVie is pressing shareholders to badger the company into agreeing to a sit-down.
Allergan has said it's working on some plans of its own to give investors "most of what they want" instead of the $53 billion hostile bid that Valeant and lead Allergan shareholder Pershing Square have put before them. And if those plans include a pickup of its own, it better get to it, shareholders say.
The share prices of AbbVie and takeover target Shire keep drifting downward amid sustained uncertainty over a deal. A couple of healthcare investors we talked to feel the deal is by no means definite--a concern that is also reflected in the continued wide spread between the latest offer price and Shire's share price.
Allergan can't stop Valeant from attempting to round up enough support to call a special meeting, overturn its board and strike its takeover defenses. But it can make moves it believes will convince shareholders it's better off standing on its own two feet.
Allergan execs have made no secret of the fact that they've been planning to come up with a lean-and-mean game plan designed to prove to investors that they'd be much better off if they spurned Valeant's offer to buy the company and gut its R&D division. Citing sources close to the company, Bloomberg is reporting that the cutbacks should include work on its most "unpromising" programs in the pipeline.
There are winners and losers in mergers, and as a general rule, executives win and at least some workers lose. That certainly is the case with Actavis and Forest Laboratories. While nearly 200 Forest employees in the St. Louis, MO, area got pink slips this week, top execs will receive up to $186 million in "merger success awards" for closing the $25 billion deal.