Allergan has dropped plans to make a bid for Shire (LON:SHP), the Botox maker has revealed. The move came as the London-listed rare disease specialist disclosed yesterday that it had rejected a takeover bid from Japan’s Takeda Pharmaceutical.
Shire’s share price jumped in the previous session, adding 5.89 percent to close 3,975.00p. The rise boosted the benchmark FTSE 100 index which gained 11.58 points to end the session 0.16 percent higher at 7,328.92. The pharmco’s shares, however, remain nearly 11 percent down over the past year.
Allergan drops bid for Shire
Dublin-based Allergan announced in a statement yesterday that it did not intend to make a bid for Shire. The move came after in an earlier statement, the Botox maker disclosed that it was in the early stages of considering a possible offer for the rare disease specialist.
Sources with knowledge of the matter meanwhile told Reuters that Allergan Chief Executive Brent Saunders had decided to drop his pursuit of the FTSE 100 group after receiving pushback from some of his shareholders, who were concerned about the company overstretching its resources.
Shire in talks with Takeda
Allergan’s move came after Japan’s Takeda confirmed that it had made a cash-and-share offer to the Board of Shire, which the rare disease specialist had rejected. The companies, however, noted that discussions remained ongoing. The offer valued the FTSE 100 group at £46.50 per share, consisting of £17.75 in cash (to be paid in US$) and £28.75 of new Takeda shares.
Bernstein analyst Wimal Kapadia told Reuters Shire was likely to be pushing for a larger cash component in current talks but Takeda was already stretched, suggesting that the chances of a deal being consummated were still ‘reasonably risky’.