AbbVie Inc.’s share price up, board to reconsider its recommendation to shareholders to support the $55-billion acquisition of Shire Plc

The board of directors of AbbVie Inc. revealed that it intends to reconsider its decision to recommend the companys investors to support the takeover of Shire Plc amid changing tax rules in the U.S. The acquisition of Shire is estimated to $55 billion.

AbbVie said in an official statement, cited by Bloomberg, that there is a board meeting scheduled for October 20th to consider “the impact of the U.S. Department of Treasury’s proposed unilateral changes to the tax regulations announced on Sept. 22, including the impact to the fundamental financial benefits of the transaction”. As reported by the Financial Times, the company also noted: “AbbVie’s board will consider, among other things, the impact of the US Department of Treasury’s proposed unilateral changes to the tax regulations announced on September 22, 2014, including the impact to the fundamental financial benefits of the transaction.”

The Treasury Department rules were announced in September and were considered to have aimed to discourage local companies to move their headquarters overseas for tax purposes. After the new financial benefits were announced by the Treasury, analysts expressed their concerns that these deals, known as inversions, have become more difficult and less attractive to companies themselves.

The proposed takeover was announced on July 18th. Now, the company seems to be withdrawing from the deal. A spokeswoman of AbbVie, Ms. Jennifer Smoter, refused to make any further comments apart from the statement the company already made. An official representative of the Treasury Department also declined to comment on any specific transactions.

As reported by Bloomberg, AbbVie also said: “AbbVie’s offer will lapse if the company’s stockholders do not adopt the agreement.”

AbbVie Inc. was 0.95% up to close at $54.13 per share yesterday, marking a one-year increase of 16.84%. The company is valued at $85.44 billion. According to CNN Money, the 9 analysts offering 12-month price forecasts for AbbVie Inc. have a median target of $67.00, with a high estimate of $85.00 and a low estimate of $54.00. The median estimate represents a +23.78% increase from the last price of $54.13.