Shire notes the announcement made by AbbVie and confirms that on 30 May 2014, Shire received an unsolicited and highly conditional proposal from AbbVie (the "Proposal") regarding a possible cash and share offer for Shire. This Proposal has been rejected.
The Proposal comprised £20.44 in cash and 0.7988 AbbVie shares per Shire share. The Proposal involved a new US listed holding company with a UK tax domicile.
Based on AbbVie's 30 day volume weighted average share price of US$54.10, the Proposal represents a value of £46.11 per Shire share (comprising 44% cash and 56% AbbVie shares). The Proposal represents:
* A premium of 23% to Shire's share price of £37.38 on 19 June 2014 (the business day prior to this announcement); and
* A premium of 30% to Shire's 30 day volume weighted average share price of £35.43.
The Proposal follows two earlier proposals, which were also rejected. At AbbVie's request, Shire met with AbbVie to enable AbbVie to explain key aspects of the Proposal. Following this meeting, the Board of Shire decided unanimously to reject the Proposal on the basis that it fundamentally undervalued the Company and its prospects.
The Board also had concerns regarding the execution risks associated with the proposed inversion structure, as AbbVie would redomicile in the UK for tax purposes.
In particular, the Board of Shire believes:
* The Proposal fundamentally undervalued Shire and its prospects as a leader in Rare Diseases and Specialty Markets
* New management has achieved a step-change in Shire's performance, resulting in significantly accelerated growth and increased shareholder returns over the last 12 months
* Shire will more than double its 2013 annual product sales to US$10 billion by 2020
* The Proposal would deny Shire shareholders the full benefits of Shire's growth strategy
Susan Kilsby, Chairman of Shire, said: "Shire has a long track record of delivering for shareholders and addressing unmet patient needs. Our high-performing management team and focused strategy are producing even stronger results, reflected in our recent top-line growth and increased profitability.
With an expanded portfolio focused on high-growth opportunities, an efficient cost base and an enhanced innovative pipeline, we have put in place a platform for long-term value creation. We believe that Shire has a strong independent future.
The Board believes the Proposal fundamentally undervalued Shire and its prospects and that as an independent company Shire's focused growth strategy will continue to deliver significant shareholder value and patient benefits."
Shareholders are strongly advised to take no action in relation to the Proposal. There can be no certainty that any firm offer will be made, nor as to the terms on which any firm offer might be made.
This statement is being made by Shire without the prior agreement or approval of AbbVie.
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