Shire's Finance Chief Jumps Ship
October 20, 2014
By Krystle Vermes, BioSpace.com Breaking News Staff
Ireland-based Shire Plc announced today that Interim Chief Financial Officer James Bowling will be stepping down during the first quarter of 2015 to become the new CFO of British water company Severn Trent.
“James has helped build and lead a high-quality finance team at Shire,” said Flemming Ornskov, Shire’s chief executive officer. “We are very grateful to him for his interim leadership over the past seven months, and his many contributions to Shire in almost 10 years with the company. We wish him well in his future endeavors.”
The news of Bowling’s departure comes just days after U.S.-based AbbVie decided to end its talks of acquiring Shire. AbbVie backed out of a deal that would have been worth approximately $55 billion, according to Forbes.
The End of a Looming Deal
AbbVie’s Board of Directors announced on Oct. 15 that it would be withdrawing its recommendation regarding the proposed Shire transaction. It proceeded to recommend that stockholders vote against the transaction, rendering the deal dead. Much of the decision was based on the impact of the U.S. Department of Treasury’s changes to tax rules, which were issued on Sept. 22. The changes eliminated some of the financial benefits of the transaction, specifically access to current and future global cash flows.
“AbbVie has always been financially disciplined and we have rigorous standards in place to ensure transactions are financially sound and deliver compelling stockholder returns,” said AbbVie’s Chairman and Chief Executive Officer Richard Gonzalez. “Although the strategic rationale of combining our two companies remains strong, the agreed upon valuation is no longer supported as a result of the changes to the tax rules and we did not believe it was in the best interests of our stockholders to proceed.”
As a result of this decision, a break fee of about $1.6 billion will be issued to AbbVie. However, Forbes has reported that AbbVie will be able to write off this fee for tax purposes.
Other items that may be written off include $137 million to secure a short-term loan, as well as fees paid to tax advisers and bankers. In turn, AbbVie could end up walking away with up to $650 in tax savings following the break-up.