Shire faces bid battle from Allergan and Takeda

Shire faces bid battle from Allergan and Takeda

Andrew Cummings
April 20, 2018

Allergan, a global company listed in NY and with its headquarters in Dublin, said it was in the early stages of considering a possible offer for Shire.

Shire did not respond to questions about a possible Allergan bid. The stock's gains were pared back following Takeda's rejection, up 4pc.

"Good for Shire, value for Allergan not clear", said Bernstein analyst Ronny Gal. Allergan shares dropped 4.4% in extremely heavy Thursday trade, to which Leerink analyst Etzer Darout noted that "investors would prefer a split or potential divestiture of parts of the business".

The bid comes amid a surge in mergers and acquisitions (M&A) in the United Kingdom as companies take advantage of cheap debt to pursue dealmaking opportunities.

Allergan, also based in the Irish capital, said its interest was in the "early stages".

The value of M&A involving British firms rose by 56.5 percent to $164.3 billion in the first three months of the year, the most since 2007, Thomson Reuters data shows. Regardless of the outcome of the talks, Takeda said it remains "well-positioned to continue its transformation, delivering portfolio growth while strengthening its pipeline and boosting profitability".

That offer was rejected by Shire's board as directors said it "significantly undervalued the company, its growth prospects and pipeline". Shire said that valued it at approximately 44 billion pounds ($62.6 billion), based on total issued and to be issued share capital.

The most recent offer was worth £43bn and would result in Shire shareholders owning about half the enlarged group.

Updating the market on Thursday, the Japanese firm revealed Shire's board had rejected its offer, which was equivalent to £46.50 a share.

Takeda's best sellers include drugs that treat metabolic diseases, cancers and cardiovascular problems.

Shire has been under pressure in the past 12 months, with its shares down by a third before Takeda's interest was made public, due to greater competition from generic drugs and debts from its $32 billion acquisition of Baxalta in 2016.

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