Shire steps up drive to get Baxalta talking after $30 billion bid

Mon Aug 10, 2015 3:38pm EDT
 
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By Ben Hirschler and Sinead Cruise

LONDON (Reuters) - Shire (SHP.L: Quote) Chief Executive Flemming Ornskov is stepping up his campaign to get Baxalta BXLT.N to the negotiating table as he pushes the benefits a $30 billion takeover offer to the U.S. biotech company's shareholders.

He has a fight on his hands, with investors in newly listed Baxalta arguing he must pay more, although one person close to the Dublin-based drugmaker said there had been "encouraging feedback" from shareholders on the logic of the tie-up.

Ornskov and Shire's chairwoman Susan Kilsby, a former mergers and acquisition banker, met Baxalta investors on both sides of the Atlantic at the end of last week and will continue the charm offensive this week.

Baxalta CEO Ludwig Hantson, meanwhile, reiterated his belief that the value of Shire's offer was "wholly inadequate".

Shares in Shire and Baxalta both rose on Monday, helped by a bullish note from Cowen analyst Ken Cacciatore, who said a takeover did not preclude an eventual acquisition of the enlarged group by a potential suitor like Pfizer (PFE.N: Quote).

Shire, which took the market by surprise with its move to forge the world's leading rare diseases company by buying Baxalta, also needs to reassure its own investors.

Joe Walters, senior portfolio manager at Royal London Asset Management, a top 20 investor in Shire, said buying Baxalta was riskier than its previous smaller deals but he was ready to see a bump in the all-share offer, which was worth $45.23 a share at Aug. 3 market prices.

“Around the $50 mark is what it seems management would have to up their offer to, and I think shareholders would be comfortable, or at least mildly comfortable, at that level," he told Reuters. "But I think they would start to get a little nervous if the offer went much above that price."   Continued...

 
Vitamins made by Shire are displayed at a chemist's in northwest London July 11, 2014. REUTERS/Suzanne Plunkett