Takeda sweetens Shire offer
Japan pharmaceutical company raises bid to US$64bil
TOKYO: Takeda Pharmaceutical Co reached a preliminary agreement to buy Shire Plc with a sweetened takeover offer of about £46bil (US$64bil), closing in on a takeover that would vault it into the ranks of the world’s top pharma companies.
The UK-listed company’s board said it was willing to recommend the latest offer to shareholders, and the companies got more time from regulators to complete a deal, Shire and Takeda said in separate statements. Takeda slumped the most in almost five years, tumbling as much as 9.3% in Tokyo trading.
A Shire takeover would rank as Takeda’s largest-ever transaction and bring the Japanese drugmaker medicines for rare diseases such as hemophilia – a field that’s luring a growing number of drugmakers because they can charge more for unique life-saving drugs than for routine treatments.
Takeda has ramped up its ambitions under chief executive officer Christophe Weber, seeking growth overseas amid patent expirations and a shrinking domestic population.
Shire rose less than 1% in London trading, valuing the company at £36bil. The drugmaker’s shareholders would own half of the enlarged company under the latest Takeda proposal.
“The deal seems to be much more of a merger,” Ronny Gal, an analyst with Sanford C. Bernstein & Co in New York, wrote in a note to clients.
Japanese investors expressed concern about the hefty debt and the possibility Shire shareholders would sell their new Takeda stock, even as the company reiterated its commitment to its investment-grade debt rating.
The transaction could result in a multinotch downgrade on Takeda’s A1 rating, Moody’s Investors Service wrote in a report yesterday.
“The market is seeing this acquisition as negative,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co in Tokyo. “It is too big. Takeda might not be able to handle it.”
Takeda is offering the equivalent of £49 a share, including £27.26 in stock and £21.75 in cash, the companies said. That’s a 60% premium to Shire’s closing price on March 27, before Takeda disclosed its takeover interest.
Since then, Takeda has raised its offer in a series of increments. The companies received an extension from UK regulators until May 8 for Takeda to make a firm offer.
The takeover is likely to go through, according to Bernstein’s Gal. Allergan Plc, another potential bidder, withdrew last week.
“If there is another bidder for Shire, they will reasonably emerge in the next two weeks,” Gal said. “We think such bidder is unlikely, as we expect Shire bankers to have left no stone unturned.”
A completed deal would be the biggest by a Japanese company of an overseas target, and create one of the world’s largest pharmaceutical companies. With few late-stage experimental drugs in its own pipeline and a shrinking home market, Takeda needs lucrative new therapies. The Shire takeover would boost Takeda’s earnings potential and transform it into a global pharma powerhouse. — Bloomberg