Shire today confirmed it rejected an unsolicited £27.3 billion (approximately $46.5 billion) takeover offer from AbbVie—the U.S. biopharma's third offer for the Irish-based biotech giant in about a month.

“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,” Shire chairman Susan Kilsby said in a statement. “We believe that Shire has a strong independent future.”

Shire’s board based its faith in the company’s future on several factors, including:

  • The projection that Shire will more than double its 2013 annual product sales to $10 billion by 2020.
  • Faster growth in 2013 than previous years under CEO Flemming Ornskov, M.D., who took office last year, succeeding Angus Russell.

Shire  finished 2013 with a 23% jump in operating income from continuing operations, to $1.734 billion on total revenues from continuing operations that rose 9%, to $4.934 billion, with product sales growth partially offset by a 36% drop in royalties and other revenues.

“The proposal would deny Shire shareholders the full benefits of Shire’s growth strategy,” the company added.

Two analysts agree with that assessment.

“It lowballs the growth that Shire is experiencing. It’s one of the fastest-growing pharmaceutical companies in the world,” Navid Malik of Cenkos Securities told Bloomberg News.

Savvas Neophytou of Panmure Gordon said in a note to investors reported by The Guardian: “Shire’s rare disease business is one of the hottest assets in biopharmaceuticals. It has not been a surprise seeing AbbVie’s approach, which was rejected.”

Reuters quoted Barclays as questioning whether the companies could achieve synergies were they to combine: “With no obvious therapeutic overlaps between AbbVie and Shire, the prospect for cost savings appears limited to us,” they said. “We would view Shire as very much a bolt-on acquisition for AbbVie, albeit one with a $47 billion price tag.

The last rejection came despite a meeting between Shire and AbbVie representatives held at AbbVie’s request to explain the updated proposal—the third by the U.S. biopharma spun out last year from Abbott Laboratories.

Shire’s statement followed a statement from AbbVie issued yesterday—first by a company to disclose interest in Shire, long speculated as a target for takeover because of its success as a specialty biotech, and growing interest by U.S. businesses in reaping tax savings by combining with overseas companies.

In their dueling press releases, each company offered slightly different details about the three offers.

Shire said the first proposal, received May 5, valued the company at £38.97 ($66.34) per Shire share, consisting of £16.23 ($27.63) cash and 0.7680 AbbVie shares per Shire share. AbbVie said its first offer would have given a total £39.50 ($67.24) in cash and stock for each Shire share.

AbbVie upped its offer May 13 to £39.96 ($68.02) , consisting of £17.13 cash and 0.7680 AbbVie shares per Shire share, according to Shire. AbbVie’s press release offered no details on the second offer.

The third proposal, Shire said, raised AbbVie’s offer to £46.11 ($78.49) per Shire share, consisting of £20.44 ($34.79) cash and 0.7988 AbbVie shares per Shire share.

AbbVie said earlier that it offered £46.26 ($78.74) in cash and stock per Shire share. AbbVie said its offers were “indicative,” designed to signal what it intended to offer had the companies been able to progress into direct takeover talks.

All AbbVie offers were based on its 30-day volume weighted average share price, which rose from $49.64 on May 5, to $50.05 on May 12, and to $54.10 by the time of the third offer.

Under U.K. law, AbbVie has until July 18 to announce either a firm intention to make an offer for Shire, or a temporary suspension of bidding.

“There can be no certainty that any firm offer will be made. Discussions are no longer ongoing,” AbbVie said.

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