UPDATE 2-Shire shares jump as sources say Allergan eyes new bid

Tue Apr 29, 2014 8:31am EDT
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(Adds possible Shire acquisitions)

LONDON, April 29 (Reuters) - Shares in London-listed drugmaker Shire Plc jumped nearly 6 percent on Tuesday after Reuters reported that Botox-maker Allergan Inc was preparing a new takeover approach.

Allergan itself is facing an unsolicited bid from Valeant Pharmaceuticals International Inc, and a bid for Shire, whose market value is more than $33 billion, would underscore how keen the U.S. dermatology drugmaker is to stay independent.

Representatives at Allergan and Shire declined to comment.

Citi analyst Peter Verdult said Shire could be attractive to Allergan given the London-listed company's strong sales of high-margin drugs for treating rare diseases. The transaction would also offer significant cost and tax savings.

Getting a deal done, however, would depend on the premium Allergan is willing to pay for Shire and the readiness of Shire shareholders to receive a large part of the payment in equity, he said.

Valeant teamed up with activist investor Bill Ackman this month to make a $47 billion offer for Allergan. But Allergan has been reluctant, partly because of Valeant's reputation for cutting costs and spending little on research and development.

Allergan had held talks in recent months with Shire about a potential takeover, but they did not pan out, Reuters reported last week.

One person familiar with the matter said Allergan could make a new approach within the next few days.   Continued...