LDN - Business

Japan's Takeda sweetens $62 billion Shire offer

[April 21, 2018] By Sam Nussey and Paul Sandle

TOKYO/LONDON (Reuters) - Japan's Takeda Pharmaceutical nudged up its offer for Shire to 44.3 billion pounds ($62 billion) on Friday to try to persuade the rare-disease drugs specialist into talks after it rejected three previous proposals.

Japan's biggest drugmaker increased its potential cash and shares bid to 47 pounds a share, up 1 percent from its previous proposal of 46.50 pounds. It also lifted the cash component by 3.25 pounds to 21 pounds a share, a shift that analysts said was needed to appeal to Shire's shareholders.

Shire said it was considering the new approach.

The latest proposal is 7 percent above Takeda's first offer and 58 percent above London-listed Shire's share price prior to any takeover speculation, the Japanese firm said.

But Shire's shares were trading at 38.42 pounds on Friday, well below the latest approach and down 3 percent on the day after another company, Allergan, decided not to pursue its own bid on Thursday, ending the prospect of a battle.

Botox-maker Allergan had seen its shares fall 7 percent after Reuters reported its interest.

Investors in Takeda are also cautious. Its shares lost almost 5 percent of their value on Friday as investors fretted over the Japanese firm making a record-breaking purchase of the London-listed company.

The drugs industry has seen a flurry of dealmaking across the world, as companies look for scale and for promising new assets to bolster their pipelines.

Takeda said it wanted to work with Shire to agree a recommended deal and to allow an extension to an April 25 deadline imposed by the British regulator to make a firm offer.

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

"Takeda believes that the improved proposal represents a highly compelling opportunity for Shire shareholders, which reflects a further increase in value and a material increase in the cash component of the consideration mix," it said.

Shire, which also makes drugs to treat attention deficit hyperactivity disorder (ADHD), rejected the previous three approaches, saying they significantly undervalued the company and the drugs it has in development.

Buying Shire would be the largest ever overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers.

It would be Weber's boldest move by far, significantly boosting Takeda's position in rare diseases, including a blockbuster haemophilia franchise, gastrointestinal disorders and neuroscience, where Shire is a leader in ADHD drugs.

But it would be a financial stretch since Shire is worth a lot more than Takeda, which has a market capitalization of 4.1 trillion yen ($31 billion).

Based on Takeda's current market value, Shire shareholders would own approximately 49 percent of the enlarged company should the latest proposal be accepted.

(Reporting by Sam Nussey in Tokyo and Paul Sandle in London; Editing by Christopher Cushing, Kate Holton and Mark Potter)

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