Shire Says AbbVie Should Proceed With Its Offer

By Rory Gallivan

LONDON--U.K. drug company Shire PLC (SHP.LN) said Wednesday that AbbVie Inc. (ABBV) should proceed with its offer for Shire on the basis of terms the two companies have agreed after Abbvie said it was reconsidering its offer for Shire.

AbbVie Inc. signaled Tuesday it was having second thoughts about its planned acquisition of Shire PLC, saying its board would reconsider the $54 billion deal in light of new Treasury rules that make it less attractive.

"Shire confirms that overnight it received notice from AbbVie under the Cooperation Agreement of the AbbVie Board's intention to consider whether to withdraw or modify its recommendation in light of the impact of the U.S. Treasury Notice of 22 September 2014," Shire said Wednesday, without giving details of the Treasury notice.

"The Board of Shire believes that AbbVie should proceed with the recommended offer on the agreed terms in accordance with the Cooperation Agreement," it added.

Shire said its board will meet to consider the current situation.

"In the event that the AbbVie Board adversely changes its recommendation and AbbVie stockholder approval is not obtained (or another triggering event occurs), a break fee of approximately $1.635 billion would be payable by AbbVie to Shire," said Shire.

Write to Rory Gallivan at [e-mail]; Twitter: @RoryGallivan

Subscribe to WSJ: http://online.wsj.com?mod=djnwires