Third Time Unlucky for Takeda and Shire

Posted April 20, 2018

Takeda, a 300-year-old Japanese drugmaker, has been working to expand its global footprint, most recently with its $5.2 billion purchase of Ariad Pharmaceuticals, a United States cancer-drug maker, last year.

Vitamins made by Shire are displayed at a chemist's in northwest London, Britain, July 11, 2014.

The Japanese firm now faces a bidding war for Shire as Botox maker Allergan is said to be in talks to buy the company, Reuters reported, citing sources.

Allergan then confirmed it was "in the early stages of considering a possible offer" for Shire, following a report from Reuters.

The biotech put out a statement Thursday afternoon in an abrupt about-face - after watching its shares drop 7% - saying that it "does not intend to make an offer for Shire".

"We think that Takeda's recently expressed interest in Shire may flush out other potential bidders, most likely among the USA pharma heavyweights including Pfizer, Amgen and AbbVie", analysts at United First Partners said in a note, as quoted by Bloomberg.

Shire might be more manageable for Allergan, which is larger than Takeda, although it has been struggling to shoulder the burden of roughly $30 billion in debt in the face of looming generic competition to its blockbuster dry eye drug Restasis. At the time of publication, Allergan was trading down 6.55 percent.

The two parties are continuing discussions regarding subsequent offers, according to a Takeda press release.

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The latest big deal proposed in the pharmaceuticals industry isn't likely to happen.

Shire rejected the £46.50 a share offer that Takeda made on 12 April.

Second proposal-A total £45.50 (about $65) per share, consisting of £28.75 (nearly $41) per share in new Takeda shares, to be listed in Japan and in the US through an ADR listing, and £16.75 (about $24) per share cash.

All of the offers constituted a mix of both shares and cash.

"Takeda and its board reiterate that it will remain disciplined with respect to the terms of any such offer", the company's statement said. Now that Allergan has admitted its interest, it has until May 17 to do the same.

Based on Takeda's current market capitalisation, Shire shareholders would own approximately 51 per cent. of the enlarged Takeda.

Shire has already rejected an offer of that amount from Japan's Takeda.

The UK's Shire has said it has rejected a bid of around £42 billion, around $60 billion, from Takeda, but is in talks with the Japanese firm's advisers to secure a better deal.

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