Boston, MA 04/28/2014 (wallstreetpr) – According to reports from Reuters, Allergan, Inc. (NYSE:AGN) is believed to have approached Shire Plc months earlier in relation to a possible takeover bid but was turned down. The negotiations being in its preliminary stage for Shire, which has a market cap of $33 billion and is based in Ireland, did not reach any progress, as per the source quoted by Reuter.
Talks With Shire Plc.
It is to be noted that the company has recently received a hostile $47 billion takeover bid from the rival Valeant Pharmaceuticals International Inc, supported by the activist investor of Pershing square Capital Management, Bill Ackman. As per the analysts, the one way for the botox maker to prevent itself from a hostile bid is to acquire drugmakers like Shire Plc, Alkermes Plc and Jazz Pharmaceuticals Plc. As per the Reuter’s report, it is not clear if Allergan will proceed its negotiations to acquire Shire or would target the takeover of any other company, in order to be independent. The representatives of both Shire and Allergan declined to comment on the subject matter.
Process of Inversion
The U.S. healthcare companies have been aggressively entering into deals with the aim of relocating their headquarters to a different country in order to get a lower tax rate. The companies are majorly targetting Ireland for such deals, also known as inversion, due to attractive tax rate of 12.5% as against the high 35% corporate tax in the United States. Some of the recent deals of similar kind are Actavis Plc’s $8.5 billion takeover of Warner Chilcott and Perrigo Company’s acquisition of Elan for worth $8.6 billion.
Moreover, MylanInc, the generic drugmaker is also looking to establish in a country other than the United States, in view of competitive pressures in the domestic market and hefty tax structure. In the meanwhile, people close to the matter are of view that Allergan, Inc. (NYSE:AGN)’s CEO David Pyott and the company’s board are not willing to accept its merger with Valeant.
