Shire Brushes Its Shoulder Off and cuts deal for NPS.
In October, Shire’s (Nasdaq – SHPG) ill-fated $52 billion deal with AbbVie died due to hysteria over tax inversions.
“The deal is the largest casualty yet of rules announced last month by the U.S. Treasury Department to make tax inversion deals more difficult. The new rules “reinterpreted longstanding tax principles in a uniquely selective manner designed specifically to destroy the financial benefits of these types of transactions,” AbbVie said late yesterday in a statement.”
Shire is bouncing back, at 1/10th the size, announcing that it has entered into an agreement to acquire NPS Pharmaceuticals (Nasdaq: NPSP), a biopharmaceutical company focused on therapies for patients with rare diseases. The deal is valued at about $5.2 billion. To demonstrate the scale of the premium, NPS had a loss of $1.5 million on about $156 million in revenue in 2013.
What are the odds a competing bidder will show up? The termination fee is $156 million, almost triple the amount of cash, and 63% of current assets, of NPS as of September 30, 2014.