Allergan set to approach Shire Plc once again: report

Allergan Inc, itself a takeover target by Canada's Valeant Pharmaceuticals, is planning to make a new takeover approach for Shire Plc, although the Dublin-based drugmaker had rejected its earlier talks on a merger, Reuters yesterday reported, citing people familiar with the matter.

Allergan's repeated approach for Shire reveals how desperate it is to abort Valeant's bid in order to stay independent.

Allergan, based in California, last week adopted a 'poison-pill' defence, a day after Valeant, Canada's biggest drug maker and one of the most aggressive acquirers, tabled a hostile $45.7-billion bid along with hedge fund owner Bill Ackman's Pershing Square Capital Management LP (See: Valeant tables hostile $45.7 bn bid for Botox maker Allergan)

Reuters had reported last week that Allergan had in recent months held talks with Shire about a possible takeover, but was rebuffed by the British specialty biopharmaceutical company. (See: Britain's Shire Plc recently rejected Allergan's takeover approach: report)

Allergan is still interested in a deal with Shire and is planning a fresh approach in the next few days, Reuters yesterday reported.

Shire, the UK's third-biggest drug maker with a market cap of $33 billion, is itself an aggressive acquirer, having made 15 acquisitions since 2000.

Shire was originally headquartered in Hampshire, UK, but moved its corporate office to Dublin and created a new holding company in Jersey in the Channel Island to avoid high taxes on global earning in the UK.

Among the incentives for acquiring an Ireland-based company is the substantially lower Irish taxes than in most countries. At 12.5 per cent, Ireland's corporate taxes are far below the 35 per cent in the US, while patents lodged in Ireland are tax free.

Shire focuses its business on attention deficit hyperactivity disorder, human genetic therapies and GI diseases as well as opportunities in other therapeutic areas through acquisitions.

Founded about 60 years ago, Allergan is a global specialty pharmaceutical company whose product range includes ophthalmic pharmaceutical, dermatology and neurological products.

Apart from Botox, Allergan's dry-eye drug Restasis generated about $940 million, its breast-implant business $378 million and through Latisse, its prescription drug that increases the length of eyelashes brought in $100 million.

The Irvine, California-based company has a market value of $49.7 billion and posted net profit of $985 million in 2013 on revenues of $6.2 billion.

Allergan, which spends about 17 per cent or about $1 billion a year of its revenue on research and development of new drugs, has 11,400 employees and manufacturing plants in Texas, Ireland, and Costa Rica.

A potential Allergan-Shire merger would create a company with a market value of over $83 billion and annual sales of more than $11 billion.