Possible Shire takeover gives spark to FTSE

Market report Scott Reid

Irish pharmaceutical heavyweight Shire saw its shares leap on the London market after Japan’s Takeda said it was pondering making a takeover approach for the multi-billion-pound firm.

Takeda stressed that its consideration of an offer was at a “preliminary and exploratory stage”, and that no approach has been made to Shire’s board. Nonetheless the FTSE 100 firm’s shares rocketed on the news, closing up 14 per cent at 3,500p.

Takeda said: “Clearly defined strategic and financial objectives are core to Takeda’s disciplined approach to acquisitions, including in relation to its dividend policy and credit rating, which are well-established. It added: “Any potential offer for Shire, if made, would have to align with this strict investment criteria.”

According to UK takeover rules, Takeda must now either make an offer or walk away by April 25.

DFS blamed acquisition costs for dragging down its profits, but added that its takeover of Sofology was already boosting revenues and that trading was starting to improve.

The furniture company said pre-tax profits tumbled 58 per cent to £7 million in the six months to 27 January, having taken a hit from acquisitions including its £25m deal to buy Sofology last year.

The company instead highlighted the 4.3 per cent rise in revenues to £396.1m logged over the half-year. Shares rose 8.4 per cent to 184.2p.

The FTSE 100 index comprising Britain’s biggest listed companies closed up 44.6 points at 7,044.74 aided by the news on Shire. Shares in pharmaceutical giant Shire surged after Japan’s Takeda said it is considering making a takeover approach for the £32.8 billion firm. The construction group fell back in the wake of the news that it was raising £157.6 million to help cover costs for a road contract in Aberdeen.