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updated: 7/11/2014 11:21 AM

Shire said to hold takeover talks with Abbvie in New York

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Bloomberg News

Shire Plc is negotiating with North Chicago-based AbbVie Inc. for a deal to combine the two drugmakers after the U.S. company raised its takeover offer to about $51.5 billion, people with knowledge of the matter said.

AbbVie Chief Executive Officer Richard Gonzalez met in New York with officials from Shire for the discussions, which are at an early stage, the people said, asking not to be identified discussing a private matter. The talks may not lead to an agreement, the people said.

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AbbVie has pursued Shire in order to move its legal address to the U.K., which would drop the combined company's tax rate to 13 percent from about 22 percent. Shire's rare disease treatments and drugs for attention deficit hyperactivity disorder would also give AbbVie a broader array of products beyond the rheumatoid arthritis injection Humira, which accounts for more than half of sales.

AbbVie made a fourth offer for Shire on July 8, valuing the Dublin-based company's shares at 51.15 pounds each, or about 30.1 billion ($51.5 billion) in total. Shire, which had rejected the previous offers saying they undervalued the prospects of its rare-disease medicines, hasn't made any formal response to the offer

Shire rose 5.9 percent to 48.70 pounds in London today, valuing the company at 28.7 billion pounds. Its U.S.-listed ADR's gained 5.3 percent to $251.24 at 11:44 a.m. in New York. The price is equal to about 48.96 pounds a share for the London- listed stock. AbbVie slipped 0.1 percent to $55.29.

Stephanie Fagan, a Shire spokeswoman, declined to comment. Adelle Infante, a spokeswoman for AbbVie, didn't immediately have a comment.

--With assistance from Simeon Bennett in Geneva, Drew Armstrong and Caroline Chen in New York and Manuel Baigorri in London.

To contact the reporters on this story: Matthew Campbell in London at mcampbell39bloomberg.net; David Welch in New York at dwelch12bloomberg.net To contact the editors responsible for this story: Mohammed Hadi at mhadi1bloomberg.net Elizabeth Wollman

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