Shire share price skyrockets as Takeda mulls over possible bid

Japanese group says consideration is at ‘preliminary and exploratory stage’

Shire share price skyrockets as Takeda mulls over possible bid

Shares in Shire (LON:SHP) have soared more than 17 percent in today’s session as Japan’s Takeda Pharmaceutical confirmed that it was mulling over a potential bid for the London-listed rare disease specialist. A potential takeover offer would come more than three years after US firm AbbVie scrapped its agreed takeover of the FTSE 100 group, following a clampdown on tax inversion deals by the Obama administration.

As of 12:35 BST, Shire’s share price had added 17.12 percent to 3,595.50p, lending some support to the benchmark FTSE 100 index which currently stands 0.06 percent lower at 6,996.20 points. The group’s shares have lost just under a quarter of their value over the past year, as compared with a near five-percent drop in the Footsie.

Takeda interested in Shire

Takeda Pharmaceuticals announced in a statement to the London Stock Exchange today that it was considering making an approach to Shire regarding a possible offer. The Japanese group, however, cautioned that its consideration was ‘at a preliminary and exploratory stage,’ with no approach yet made to the FTSE 100 company’s board.

“Takeda believes that a potential transaction with Shire presents an opportunity to advance Takeda's stated Vision 2025, build on its current strong momentum, and create a truly global, value-based Japanese biopharmaceutical leader,” the Japanese drugmaker pointed out.

Analysts weigh in

The Guardian quoted analysts at Jefferies as commenting that they saw the strategic rationale for the deal.

“Shire’s leading global position in rare diseases would likely be attractive for most large pharma/biotech,” the broker pointed out, adding, however, that “Takeda’s $42-billion market cap vs Shire’s $47 billion raises questions on a potential deal structure”.

At the time of writing, Shire had commented on Takeda’s interest.

As of 12:59 BST, Wednesday, 28 March, Shire PLC share price is 3,590.50p.

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