The Irish drugmaker Shire PLC Is offering to buy Baxalta for about $30 billion in stock as it attempts to solidify its strengthening position in rare disease treatments.
Advertisement
“We believe the proposed combination of Shire and Baxalta would be strategically and financially attractive for both of our companies, accelerating our respective growth ambitions and creating the leading global biotech company in rare diseases”, said Shire CEO Flemming Ornskov in a statement.
Under Shire’s proposed deal for Baxter, Baxalta holders would receive 0.1687 Shire American depositary shares for each Baxalta share held, implying a value of $45.23 per Baxalta share and a premium of 36% based on Monday’s closing prices.
Shares in Shire were down 4.7 per cent on the news.
The Illinois-based firm, which has a staff of around 16,000, develops biotech treatments for rare blood conditions, cancers and immune system disorders.
“As a result, you have left us with no choice but to make our proposal known to your shareholders”, Ornskov wrote in the letter. 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.
Shire said Baxalta has resisted its entreaties to seriously negotiate.
In a press release, Shire claimed that a combined company would be “the global leader in rare diseases” that would generate $20 billion in sales within the next five years. Revenue rose 4 percent to just under $1.56 billion during the second quarter.
Shares in Actelion, which had previously been tipped as a potential target for Shire, fell 2.9 percent.
AbbVie had said the transaction became untenable owing to the “unacceptable level of risk” following new US Department of Treasury rules intended to discourage deals in which US companies merge with foreign competitors to shift their headquarters to countries with a lower tax rate.
Advertisement
Evercore and Morgan Stanley are acting as financial advisers to Shire.
