* AbbVie retracts claim that Shire investors support bid
* UK rules require written statements to make such claims
* Shire considering raised $51 bln offer, yet to respond
(Adds further detail on advisers, latest shares, Breakingviews
By Ben Hirschler
LONDON, July 9 U.S. drugmaker AbbVie
has been forced to retract comments by its chief executive about
shareholder support for its $51 billion bid for Shire
after being caught out by British takeover rules.
Chief Executive Richard Gonzalez told Reuters in an
interview on Tuesday he believed major Shire investors were
"generally supportive of this transaction" - a comment he
repeated in conversations with other media.
Under Takeover Panel rules, designed to ensure fair
treatment for all investors, a company attempting to acquire a
rival is not allowed to claim support for its bid unless it has
this in writing from shareholders.
"AbbVie confirms that it has not received any written
commitments of support and accordingly retracts the statements,"
it said on Wednesday.
The error is a further example of the strict nature of
British takeover rules, which also caused problems for Pfizer
during its unsuccessful bid for AstraZeneca
earlier this year.
The retraction is embarrassing for AbbVie and its key
advisers - investment bank J.P. Morgan and public relations firm
Brunswick, both of which also advised Pfizer. Pfizer limited its
options and caused some market confusion when it declared its
$118 billion offer for AstraZeneca "final".
AbbVie's climbdown is further evidence of how closely the
Takeover Panel is monitoring bid situations. The watchdog also
forced U.S. medical devices firm Stryker to announce in
May it did not intend to make an offer for Smith & Nephew
following a report it was considering a bid.
WAITING FOR SHIRE
AbbVie raised its offer for Shire to 30.1 billion pounds
($51.3 billion) on Tuesday, hoping to win over its reluctant
target after three earlier offers were rejected.
Shire has yet to respond to the latest cash-and-stock offer,
which was worth 51.15 pounds a share at July 7 prices, or 11
percent more than AbbVie's previous proposal. It said on Tuesday
that its board was meeting to consider it.
Industry analysts said it was unlikely to be enough to get a
deal done but it could bring Shire to the negotiating table.
Several analysts have valued Shire in the mid-50s pounds per
share or higher.
However, with AbbVie's shares falling 3 percent on Tuesday,
the actual value of the latest offer has fallen to 50.19 pounds
per share, which Panmure Gordon analyst Savvas Neophytou said
was inadequate and was likely to be rejected by the Shire board.
Other analysts said Shire's board might try to seek
alternative offers in order to push the price higher, although
AbbVie's Gonzalez told Reuters he was not aware of any
counterbidders interested in the company.
Shire shares were down 1.3 percent at 44.70 pounds by 1120
The silence from the Shire camp and the failure by AbbVie to
land a decisive blow has prompted some hedge funds to take
profits, according to people close to the situation.
Worries that the two sides may not manage to reach a deal,
as happened with Pfizer-AstraZeneca, has fuelled volatility in
Shire shares, which fell back sharply on Tuesday after initially
rising on news of the raised bid.
AbbVie may have some room to offer more but is likely to be
constrained by a desire to maintain its investment grade credit
The U.S. company is eager to buy Shire both to reduce its
tax bill by moving its tax base to Britain - a tactic known as
inversion - and to diversify its drug portfolio by adding
Shire's specialised drugs for hyperactivity and rare diseases.
Moody's Investors Service said the latest increased offer
was credit negative as it would raise AbbVie's financial
leverage, with its ratio of debt to earnings before interest,
taxes, depreciation and amortisation (EBITDA) expected to reach
a range of 3.2 to 3.6 times, compared to 2.2 times at the end of
(Editing by Jane Merriman and Tom Pfeiffer)