April 24, 2018 / 12:47 PM / 4 months ago

Shire receives new bid from Takeda as takeover deadline looms

LONDON (Reuters) - Japan’s Takeda Pharmaceutical (4502.T) has sweetened its $62 billion bid for Shire (SHP.L) as it races to agree terms with the drugmaker before a deadline to strike a deal expires on Wednesday.

FILE PHOTO: Vitamins made by Shire are displayed at a chemist's in northwest London, Britain July 11, 2014. REUTERS/Suzanne Plunkett/File Photo/File Photo

Dublin-based Shire, a member of Britain’s benchmark FTSE 100 stock index, said it had received a fifth takeover proposal from Takeda on Tuesday but gave no details of the revised bid. It said its board was considering its position.

Takeda, which confirmed the new proposal without providing details, said there was no certainty a firm offer will be made.

It comes after Takeda’s fourth bid for Shire on Friday, which was pitched at 47 pounds per share and made up of 26 pounds in Takeda stock and 21 pounds in cash. That valued Shire, which is led by Chief Executive Flemming Ornskov, at 44.3 billion pounds ($61.8 billion).

Under British rules, Takeda has until 5 p.m. (1600 GMT) on Wednesday to make a firm offer or walk away from Shire.

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

Shares in the London-listed company were up 3.4 percent at 39.30 pounds in afternoon trade.

The latest bid came just before Shire held its annual shareholder meeting in Dublin on Tuesday.

“As of now we can only say that discussions between the advisers of Shire and Takeda are ongoing,” Susan Kilsby, the drugmaker’s chairwoman, told investors at the meeting, which lasted less than 15 minutes.

Shire focuses on treatments for rare diseases and attention deficit hyperactivity disorder and a takeover would catapult Takeda into the top ranks of global drugmakers.

BIGGEST OVERSEAS ACQUISITION

It would also mark the biggest overseas acquisition by a Japanese firm and an audacious move by Takeda’s French chief executive, Christophe Weber.

Allergan (AGN.N), the U.S. maker of Botox, had been considering a rival bid for Shire but ruled itself out of making an offer on April 19. Shire also announced last week it was selling its oncology business to unlisted French drugmaker Servier for $2.4 billion.

Takeda’s shares closed down 1.5 percent on Tuesday, giving it a market value of 3.86 trillion yen ($35.5 billion), according to Thomson Reuters data. That is much smaller than the value of the fourth bid for Shire that Takeda disclosed last week.

Takeda investors have been skeptical about the merits of a Shire deal, given the size of the potential purchase and the likely need for a large share issue, which could be highly dilutive.

Weber was promoted to chief executive in 2015, becoming the drugmaker’s first non-Japanese boss.

The Japanese firm said last month that buying Shire would bolster its position in the United States, in gastrointestinal diseases and neuroscience.

Its bid comes amid a surge in dealmaking in the pharmaceuticals industry as the biggest players hunt for promising assets to bolster their pipelines.

Shire traces its roots back to 1986, when it began as a seller of calcium supplements to treat osteoporosis, operating from an office above a shop in Hampshire. Since then it has grown rapidly through acquisitions into a giant that generated annual revenues of about $15.2 billion last year.

($1 = 0.7170 pounds)

Reporting by Ben Martin. Additional reporting by Padraic Halpin in Dublin; editing by Jason Neely and Adrian Croft

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