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Shire to recommend $64bn Takeda deal to shareholders

Acquisition would be largest ever outbound deal by Japanese company

Shares in Takeda tumbled further on Wednesday on news of the Shire deal. Photograph: Suzanne Plunkett/Reuters

Wed Apr 25 2018 - 06:50

Rare disease drug maker Shire said on Tuesday it was willing to recommend a sweetened $64 billion offer from Japan's Takeda to shareholders, in what could be the biggest acquisition of a drug company this year.

But shares in Takeda tumbled further on Wednesday, losing 7 per cent as investors fretted over its ability to buy a company twice its size. Its stock slide - 18 per cent since the news of a possible bid broke - also makes the cash-and-share deal less appealing to Shire shareholders.

The latest development, first reported by Reuters, comes after London-listed Shire rejected four previous offers from Takeda and will leave Shire shareholders owning half of the combined company.

The fifth offer is worth 49.01 pounds per share, comprised of 27.26 pounds per share in new Takeda shares and 21.75 pounds per share in cash. That represents a 4.3 per cent premium to Takeda’s fourth proposal on April 20th and an 11.4 per cent premium to its first approach on March 29th.

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Shire, a member of Britain’s benchmark FTSE 100 stock index, said its board agreed to extend a Wednesday regulatory deadline to May 8th so Takeda can conduct more due diligence and firm up its bid. Shire added the deadline may be extended further if needed. Any deal is subject to the resolution of several issues, including completion of due diligence by Shire on Takeda, the Dublin-based company said.

A deal would significantly boost Takeda's position in gastrointestinal disorders, neuroscience, and rare diseases, including a blockbuster hemophilia franchise. If successful, it would be the largest overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers.

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. – Reuters

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