Takeda takes a back seat as Shire off­loads can­cer unit

The Daily Telegraph - Business - - Business - By Aye­sha Javed

DRUG maker Shire has agreed to sell its on­col­ogy busi­ness to a French ri­val, putting into ques­tion whether a bid for the FTSE 100 firm from Ja­panese suitor Takeda will emerge.

Shire is sell­ing the on­col­ogy busi­ness to Servier, a phar­ma­ceu­ti­cal com­pany gov­erned by a non-profit foun­da­tion, for $2.4bn (£1.7bn).

The deal comes as Takeda chief ex­ec­u­tive Christophe We­ber is un­der­stood to be lin­ing up meet­ings with its ma­jor hold­ers ahead of mak­ing a po­ten­tial £35bn of­fer for Shire. Its big­gest in­vestors in­clude US-based Black­rock, Cap­i­tal Group and JP Mor­gan.

The on­col­ogy unit sale is ex­pected to close in the sec­ond or third quar­ter of the year and Shire boss Flem­ming Orn­skov said the firm would “con­sider re­turn­ing the pro­ceeds of the sale to share­hold­ers through a share­holder-ap­proved share buy­back af­ter the cur­rent of­fer pe­riod re­gard­ing Takeda’s pos­si­ble of­fer for Shire con­cludes”.

On­col­ogy was an area Takeda had iden­ti­fied as a driver for its po­ten­tial takeover bid. It said that any deal would strengthen its core ther­a­peu­tic ar­eas of de­vel­op­ing medicines for can­cer, gas­troen­terol­ogy and neu­ro­science.

Last year the on­col­ogy busi­ness made $262m of rev­enue and Mr Orn­skov said the com­pany had “con­cluded that it is

‘Given that on­col­ogy is a small part of Shire, the deal shouldn’t se­verely im­pact the de­ci­sion to make an of­fer’

not core to Shire’s longer-term strat­egy”, adding that the drug maker could make fur­ther “se­lec­tive dis­pos­als of non-strate­gic as­sets”.

Em­manuel Pa­padakis, an an­a­lyst at Bar­clays, said that the deal was “likely to ob­fus­cate the prob­a­bil­ity of Takeda’s cur­rent ap­proach”.

Mean­while, Peter Welford, an an­a­lyst at Jef­feries, said that the deal “should also boost Shire’s ne­go­ti­at­ing po­si­tion on ask­ing price in the cur­rent of­fer pe­riod with Takeda”, but he added that there could be “in­cre­men­tal risks” to an ac­qui­si­tion due to the “on­go­ing com­plex in­te­gra­tion” of Bax­alta, the for­mer bio­science busi­ness of Bax­ter that Shire merged with in 2016.

Shares in Shire fell 1.3pc to £35.59.

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