Shire, Takeda reach breakthrough in deal talks

Anna Jefferson
April 25, 2018

Shire said in a statement that its board would be willing to recommend the offer to the company's shareholders, providing certain conditions are met.

Shire's board said that its recommendation of the revised proposal will be subject to satisfactory resolution of the other terms of Takeda's offer.

Late Tuesday Shire reported that Takeda had upped its bid to £27.26 in new Takeda shares and £21.75 in cash, coming to £49 a share.

"Given super-low interest rates in Japan and Takeda's ample cash flow, I believe the money would be better used than stocked up".

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Since news of a possible bid from Takeda broke, shares in the company have fallen 18%, making the deal less attractive to Shire shareholders.

Given the risk of prolonged formal takeover negotiations and regulatory hurdles, there is potential for a competitor to emerge (Allergan?), now that Takeda has potentially shown its final hand. Shire added the deadline may be extended further if needed.

Allergan Plc, the USA maker of Botox, had been considering a rival bid for Shire but ruled itself out of making an offer last week.

Shire's share price has been subdued in London in today's session following yesterday's rally, having given up 0.87 percent to 3,896.00p as of 10:04 BST. Shire was also almost bought by USA drugmaker AbbVie Inc in 2014, until US tax rule changes caused the deal to fall apart. It would also be the third biggest acquisition of a UK-traded company in history. That is much smaller than the value of the fourth bid for Shire that Takeda disclosed last week.

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The first offer - received by Shire at the end of March - valued the drugmaker's shares at GBP44.00 each, with Shire shareholders to own around half of the enlarged Takeda.

Weber, who became Takeda's first non-Japanese CEO in 2015, has said publicly it was looking for acquisitions to reduce its exposure to a mature Japanese pharmaceutical market.

The Japanese firm said last month that buying Shire would bolster its position in the United States, in gastrointestinal diseases and neuroscience.

Shire traces its roots back to 1986, when it began as a seller of calcium supplements to treat osteoporosis, operating from an office above a shop in Hampshire, southern England. Shire PLC's revenue was up 109.0% compared to the same quarter previous year.

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