Shire may be upping the ante in pursuit of Baxalta—with faster cash
- In early August, Shire announced that it had made an all-stock, $30 billion offer to acquire Baxter spinoff Baxalta at $45.23 per share, or a 36% premium over the firm's closing price on Monday.
- Baxalta has continually rejected Shire's all-stock offers—but now Shire is reportedly considering adding a quicker cash payout to Baxalta shareholders to sweeten its bid.
- Shire said that it would return cash to shareholders by initiating a stock buyback program soon after the proposed deal closed.
For the last two months, Dublin-based Shire's efforts to acquire Baxalta, based in Deerfield, IL, have been spurned. However, Shire's CEO, Fleming Ornskov, isn't being dissuaded. His take on the situation is that when the two companies are combined, they could together become a rare-diseases powerhouse, combining Shire's rare disease portfolio, as well as its hyperactivity drugs, with Baxalta's hemophilia and immune deficiency drugs.
There are a couple of problems (besides the big problem that Baxalta is playing very hard to get). First of all, the value of Shire's stock has dropped by 17% in the last couple of months, and second, Baxalta was only recently spun off from Baxter, meaning there would be tax implications to any type of merger/acquisition deal.