Listed Shire (again) rejects Takeda's £43bn takeover offer

Darnell Taylor
April 19, 2018

Following the Board meeting on 14 April 2018 which rejected the Third Proposal, at the Board's request Shire's advisers entered into a dialogue with Takeda's advisers to discuss whether a further, more attractive, proposal may be forthcoming and to understand the basis on which such a proposal would be made, Shire said.

Buying Shire would be transformational for Takeda but would be a big financial stretch, since the company is worth in excess of $10 billion more than the Japanese group.

Shire shares jumped as much as 8pc following reports of the offer, before paring back its gains once Takeda confirmed it had been rejected, up 4pc by early afternoon trading.

The firm's French CEO Christophe Weber is trying to turn Takeda into a global pharma company, and believes the Shire merger would accelerate this process.

Shire shares closed the day nearly 6% higher amid the prospect of a possible bidding war. Credit Suisse Group lowered their target price on shares of Shire from GBX 4,500 ($64.43) to GBX 4,000 ($57.27) and set an outperform rating for the company in a research note on Thursday, February 15th.

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Shire said in January that it would run its attention deficit hyperactivity disorder (ADHD) business, which consists mainly of its blockbuster drug Vyvanse, separately and possibly seek a separate listing.

In a statement released Thursday morning, Shire said that Takeda had started the bidding March 29 at £28 per share in new Takeda shares with £16 per share in cash, or a total of £44.

The two earlier cash-and-share offers were worth 44 and 45.50 pounds per share, respectively.

The proposal, comprising of £17.75 in... Based on Takeda's current market capitalisation, Shire shareholders would own approximately 50 per cent. of the enlarged Takeda.

Shire has been under pressure in the last 12 months, with its shares down by a third before Takeda's interest was made public, due to greater competition from generic drugs and debts from its $32 billion acquisition of Baxalta in 2016. That would value Shire at approximately 43 billion pounds, or $61 billion, Thomson Reuters data showed.

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