The boss of AbbVie will fly to London this week to meet Shire’s biggest investors to determine what it will take to land a successful bid for the British drug company.
It is speculated that AbbVie is so determined to pursue Shire as a possible Inversion Deal to reduce their tax rate.
Dublin-based Shire, which specializes in drugs to treat attention-deficit disorder and rare diseases, rejected a $46 billion takeover offer from the North Chicago, Ill., drug company last week, saying it undervalued Shire’s growth prospects.
AbbVie has until July 18 under U.K. takeover rules to make a firm bid for Shire or walk away. AbbVie has said it wants to bring Shire back to the bargaining table, but it hasn’t ruled out launching a hostile bid.
If Shire were to sign deals of its own, its larger market capitalization or a different disease focus might deter a would-be acquirer.
When AbbVie first approached Shire in early May, “there were a number of large opportunities that we were considering, pursuing, preparing for or engaging in,” Mr. Ornskov said.
He added that U.K. takeover rules now prevent any deal or deals worth more than 10% of Shire’s market capitalization—or about $4.5 billion—at least until July 18.
“I have been significantly in the market for assets that would strengthen our growth and strengthen our pipeline,” Mr. Ornskov said, adding that this included larger deals such as the $4.2 billion takeover it recently concluded for rare-disease specialist ViroPharma Inc.
“If I am given leeway, there are a few phone numbers I can execute on immediately,” he said.
Mr. Ornskov has signed six deals since taking over the top job at Shire a year ago, ranging in value from $75 million to $4.2 billion. During that time, its shares have more than doubled in value.
Mr. Ornskov said he had received “incredibly positive feedback” on the value he has delivered for shareholders since taking over as chief executive.
He declined to comment on investors’ reaction to Shire’s rejection of the AbbVie bid, citing U.K. takeover rules.
Mr. Ornskov said that the last few days had been spent in the U.S. engaging with investors and companies that Shire had potentially been interested in, and that he hadn’t approached other would-be acquirers.
A successful takeover offer for Shire would require a significant premium, he said—adding, “our board of directors’ assessment is that we’re not close to that.”
AbbVie’s offer of £46.26 ($78.76) a share represents a 33% premium to Shire’s share price the day before its first approach was made, the U.S. company said Wednesday. The shares were trading only slightly below the offer price Friday afternoon, up 1.7% at £46.14.
AbbVie added that it believes a combination of the two can strengthen their expertise in gastrointestinal, neuroscience and rare-cancer drugs and increase revenue through a larger combined sales force.
Part of a deal for Shire would involve relocating AbbVie’s tax domicile from the U.S. to the U.K.
“I think the main strategic rationale here is tax inversion,” Mr. Ornskov said of the AbbVie deal. “I think that the overlap on the therapeutic areas is limited to gastrointestinal diseases.”