Shire (LON:SHP) has rejected Takeda Pharmaceuticals’ takeover bid, which valued the rare disease specialist at about £42.4 billion. The two drugmakers, however, noted that talks over a potential offer remained ongoing.
Shire’s share price, which jumped sharply on reports of the bid, has given up some of its gains after It emerged that the blue-chip group had rejected the offer, and as of 13:53 BST was 1.17 percent higher at 3,798.00p. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.06 percent higher at 7,321.83 points.
Shire rejects Takeda bid
Takeda announced in a statement today that it had made a revised proposal to the Board of Shire on April 12, to acquire the company for a price equivalent to £46.50 per share, comprised of £17.75 in cash (to be paid in US$) and £28.75 of new Takeda shares. The Financial Times noted in its coverage of the news that the offer valued the UK group at £42.2 billion. While the FTSE 100 drugmaker rejected the proposal, the Japanese group noted that discussions between the parties remained ongoing.
Shire confirmed the news in a separate statement, noting that it had received three conditional proposals from Takeda regarding a possible offer.
“At the Board's request Shire’s advisers entered into a dialogue with Takeda's advisers to discuss whether a further, more attractive, proposal may be forthcoming,” the London-listed rare disease specialist said in the statement.
Analysts weigh in
“We think that Takeda’s recently expressed interest in Shire may flush out other potential bidders, most likely among the U.S. pharma heavyweights including Pfizer, Amgen and AbbVie,” analysts at United First Partners said in a note, as quoted by Bloomberg.
WebFG News meanwhile quoted Barclays as saying in a note before any specific offer was confirmed that that they continued “to believe the offer would need to be meaningfully in excess of £40/sh to stand a reasonable chance of success”.
The news comes ahead of Shire’s annual general meeting next week when the company is likely to face criticism over its pay policy.