Shire board recommends £46 billion offer from Takeda

Takeda makes fourth offer to buy Shire

Shire board recommends £46 billion offer from Takeda

The latest proposal - the fifth one made by Takeda - comprises GBP27.26 in new Takeda shares and GBP21.75 in cash for each Shire ordinary share. The offer is a 7% increase on the first bid submitted in late March and a 58% premium on Shire's share price ahead of Takeda's interest going public. None of what is now on offer is binding - either party is free to walk at any point, and Takeda is also entitled to lower its present offer.

The board is considering its position and there can be no certainty a firm offer will be forthcoming.

Shire (LON:SHP) has reached a preliminary tie-up deal with Takeda Pharmaceutical, the group has said. Since then it has grown rapidly through acquisitions to generate revenues of about $15.2 billion a year ago.

The combined company would have its primary listing in Tokyo and also offer American Depository Receipts - a move which will give Shire investors an opportunity to cash out more easily.

"Shire shareholders would give their right arms to be in Sky's position - two strong USA firms chasing it".

At first glance, the mild-mannered Weber might not seem the most likely choice to orchestrate the biggest overseas acquisition in Japanese history. The business had revenue of $4.14 billion during the quarter. The company has a market capitalization of $52.77 billion, a price-to-earnings ratio of 181.72 and a beta of 1.53.

Shire brings a bench of rare-disease drugs, including for hemophilia and hereditary angiodema, that will catapult Takeda into a higher league. With the annual price review in place, the sector's sales in Japan, the world's third-largest drug market, are estimated to fall by 30 percent to about $62 billion through 2025, according to a study by Pharmaceutical Research and Manufacturers of America (PhRMA).

Shire CEO Flemming Ornskov's biggest acquisition was the takeover of rare disease competitor Baxalta in 2016 for $32 billion. In addition, the Japanese government is increasingly pressuring drug companies to limit or cut prices of blockbuster medicines. The similarity in size has raised questions on whether the damage to Takeda's finances would be worth the boost to its portfolio and pipeline.

Britain's Lloyds Banking Group lost 1.7 percent after slightly missing expectations for pre-tax profits but Jefferies analysts said the earnings figures were unlikely to change the overall picture.

Investors in Shire, meanwhile, have adopted a cautious stance.

As with all the previous bids, the merged company would be listed in Japan and the US.

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