Shire, Takeda Reach Breakthrough In $64 Billion Deal Talks

Shire shares rise as it unilaterally announces Takeda's sweetened deal

Shire shares rise as it unilaterally announces Takeda's sweetened deal

The proposal accepted by Shire's board came in late yesterday, and comprises £27.26 in new Takeda shares, and £21.75 in cash.

Shire plc, a biotechnology company, researches, develops, licenses, manufactures, markets, distributes, and sells specialist medicines for people with rare diseases and other specialized conditions worldwide.

However, that deadline can be moved back at the request of the FTSE 100 drugmaker and Takeda had said on Friday it hoped negotiations with Shire would lead to an extension.

Takeda investors, however, reacted badly to the increased bid, which is up from the £42.9 billion ($60 billion) the company offered previously.

In a short statement this lunchtime, Shire said Takeda had revised its proposal.

Shire PLC (NASDAQ:SHPG) traded down 0.52% during midday trading on Monday, hitting $164.17.

Takeda, led by Frenchman Christophe Weber, has been actively looking overseas for acquisitions.

"Given super-low interest rates in Japan and Takeda's ample cash flow, I believe the money would be better used than stocked up".

Takeda and its Board have remained disciplined with respect to the terms of the Revised Proposal and Takeda intends to maintain its well-established dividend policy and investment grade credit rating. "This huge acquisition bodes a spike in leverage that could result in a multi-notch downgrade", said analyst Yukiko Asanuma.

But he said Shire offered an attractive portfolio. It said on Wednesday it meant to maintain its dividend policy and investment-grade credit rating following the deal. The company has market cap of $48.58 billion.

Deal making has surged in the drug industry this year as large players look for promising assets to improve their pipelines. A Takeda-Shire transaction would be by far the biggest.

Shire has always been seen as a likely takeover target.

Shire has always been seen as a likely takeover target and was almost bought by USA drugmaker AbbVie Inc in 2014, until US tax rule changes caused the deal to fall apart.

Botox maker Allergan confirmed last week it would not make a bid for Shire, just a day after saying it was weighing up an offer.

Earlier this month, Shire entered into a deal to offload its oncology business to France-based Servier for $2.4bn.

Takeda bought U.S. biotech Ariad Pharma for $4.7billion past year, although many market commentators felt this was overpriced.

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