Shire edging towards $30bn-plus Baxalta deal
Dublin-based drug maker Shire has made a new acquisition offer for peer Baxalta International that is roughly in line with the latter’s valuation expectations, according to people familiar with the matter.
It is thought that this makes a deal in the coming weeks likely.
An agreement would successfully end Dublin-based Shire’s five-month pursuit of Illinois-based Baxalta and create one of the world’s leading specialists in rare diseases. Baxalta’s board rejected an all-stock offer from Shire in August, saying it had significantly undervalued the company.
While the exact terms of the deal could not be learned, Shire has now added enough cash to its previous all-stock offer for talks to advance, the people said. Baxalta would be valued in excess of $30bn (€27.5bn) in any deal, one of the people added.
Baxalta shares were up 4.4% percent at $39.74 in afternoon trading in New York. American depository shares of Shire were trading down 0.4% at $194.40.
The sources asked not to be identified because the negotiations are confidential. Baxalta and Shire spokespeople offered no comment.
The challenging deal talks with Baxalta came after Shire pursued other deals in the rare diseases sector. Shire announced on November 2 that it was buying Dyax, which manufactures treatments for a rare genetic disease, for $5.9bn.
A combination of Shire and Baxalta would add to the more than $600bn in healthcare merger deals this year, which has been the busiest in the history of healthcare deal making. Baxalta develops biotech treatments for rare blood conditions, cancers and immune system disorders. It was spun off from Baxter International in July. It employs 16,000 people and had proforma revenue of $6bn in 2014.
Meanwhile, the ‘Financial Times’ reported that Baxalta was continuing to sound out potential alternatives to a takeover by Shire even as it remained open to a deal with Shire.
Shire moved its headquarters from the UK to Ireland in 2008 to take advantage of the lower corporate tax here. Shire itself was subjected to a takeover attempt earlier this year by US company AbbVie. It was announced in July that AbbVie would acquire Shire for $54.8bn, however the US firm reconsidered the deal after the US introduced new tax inversion laws. Shire received a $1.65bn break fee after the deal, which the company was advised was not liable for tax.
