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| <NonNumbericText> <div style="font-size:12pt"><p>27. Interest expense <br /><br />Interest expense for the years to December 31, 2009, 2008 and 2007 was $39.8 million, $139.0 million and $70.8 million respectively. Interest expense primarily includes interest on Shire’s convertible bond of $33.3 million (2008: $33.3 million; 2007: $18.3 million).<br /><br />Interest expense for the year to December 31, 2008 included $87.3 million (2009: $nil and 2007: $28.0 million) in respect to the TKT appraisal rights litigation. On November 5, 2008 Shire successfully settled all aspects of this litigation with all parties. Shire paid the same price of $37 per share originally offered to all TKT shareholders at the time of the July 2005 merger, plus interest. The Delaware Chancery Court approved dismissal of the case and Shire made payment to the dissenting shareholders on November 7, 2008. The settlement represented a total payment of $567.5 million, representing consideration at $37 per share of $419.9 million and an interest cost of $147.6 million. <br /><br />Prior to reaching this settlement, the Company accrued interest based on a reasonable estimate of the amount that may be awarded by the Court to those former TKT shareholders who requested appraisal. This estimate of interest was based on Shire’s cost of borrowing. Between the close of the merger and November 5, 2008 the Company applied this interest rate on a quarterly compounding basis to the $419.9 million of consideration to calculate its provision for interest.<br /><br />Upon reaching agreement in principle with all the dissenting shareholders, the Company determined that settlement had become the probable manner through which the appraisal rights litigation would be resolved. Under current law, (although not applicable in this case because the merger was entered into before the relevant amendment to the law became effective) the court presumptively awarded interest in appraisal rights cases at a statutory rate that is 5 percentage points above the Federal Reserve discount rate (as it varies over the duration of the case). In connection with the settlement, the Company agreed to an interest rate that approximates to this statutory rate. Based on the settlement, the Company amended the method of determining its interest provision to reflect this revised manner of resolution and upon reaching settlement with the dissenting shareholders recorded an additional interest expense of $73.0 million in its consolidated financial statements for the year to December 31, 2008. </p></div> </NonNumbericText> |
| <NonNumericTextHeader> 27. Interest expense Interest expense for the years to December 31, 2009, 2008 and 2007 was $39.8 million, </NonNumericTextHeader> |
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