AbbVie Inc Spikes On Reported End-Run Around Inversion Rules

AbbVie Inc ABBV spiked Friday on news it may seek added financing for its $54 billion acquisition of Shire PLC SHPG in order to surmount new obstacles to tax inversions.

U.S. companies face new limits on the amount of offshore cash they can use in engineering inversion deals, under rules imposed this week by the Obama Administration.

AbbVie may circumvent the difficulty by borrowing $7 billion more than it had planned for the deal, according to a Bloomberg report Friday citing unnamed sources.

North Chicago-based AbbVie announced its plan to acquire Irish drug-maker Shire in July in a deal expected to slash its tax rate to 13 percent from 22 percent.

Barclays analysts said recently that AbbVie and Shire are dissimilar companies and operating synergies won't result from their merger.

But AbbVie CEO Richard Gonzalez told analysts in a July conference call that "we wouldn't be doing it if it was just for the tax impact. It's an excellent strategic fit."

Shire gained 2.5 percent to $260.88 per share. After opening sharply higher, AbbVie traded recently at $58.43 a share, up 0.7 percent.