UPDATE 1-Shire confirms in talks with AbbVie on takeover bid

Fri Jul 11, 2014 5:03pm EDT

(Adds details on meeting, background on companies)

July 11 (Reuters) - Shire Plc on Friday confirmed it has held a meeting with U.S. drugmaker AbbVie Inc to discuss AbbVie's takeover bid for the Dublin-based maker of drugs for rare diseases.

Shire, in a release, said it would provide a further update "when appropriate." It added there can be no certainty that any firm offer will be made nor as to the terms of any such offer.

The meeting, between Shire Chief Executive Flemming Ornskov and AbbVie CEO Richard Gonzalez, took place Thursday in New York, according to a source familiar with the matter.

AbbVie, which is based in suburban Chicago and makes top-selling arthritis drug Humira and other medicines, has offered $51 billion for Shire, hoping the deal would cut its tax bill and diversify its product line.

But Shire has rejected three previous proposals from AbbVie, saying they had fundamentally undervalued the company.

Some top investors in Shire have been urging it to engage with AbbVie, after a prolonged silence from the London-listed drugmaker.

Shire is a serial acquirer, having done six deals since Ornskov took the helm of Shire 14 months ago. It bought rare disease specialist Viropharma for $4.2 billion last November in its biggest deal yet - and Ornskov has said further "large" deals were possible.

Drugs for rare diseases are highly lucrative, often commanding prices of hundreds of thousands of dollars a year.

By moving into the field, AbbVie would make itself far less dependent on Humira, which accounts for almost 60 percent of AbbVie's sales. (Reporting by Ransdell Pierson; Editing by Jonathan Oatis and Grant McCool)

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