Britain’s Shire Plc recently rejected Allergan’s takeover approach: report

Allergan Inc, itself a takeover target by Canada's Valeant Pharmaceuticals, had in recent months held talks with British specialty biopharmaceutical company Shire Plc about a possible takeover, but was rebuffed, Reuters yesterday reported, citing people familiar with the matter.

The preliminary talks did not progress to serious discussions between the two companies, the report said.

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 are 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.

Allergan, based in California, this 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. (See: Valeant tables hostile $45.7 bn bid for Botox maker Allergan)

Speaking to shareholders and analysts in New York, Valeant's CEO, Michael Pearson said that it would have preferred to negotiate a deal in private, but Allergan's board had refused to discuss a merger.

Reuters does notspecify whether Allergan approached Shire only after Valeant had initiated talks with Allergan.

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.

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.