Shire share price rallies as pharmco agrees £46bn deal with Takeda

Tie-up set to complete in first half of 2019

Shire share price rallies as pharmco agrees £46bn deal with Takeda

Shares in Shire (LON:SHP) have jumped in London in today’s session as the blue-chip pharmco agreed a £46-billion takeover deal with Japan’s Takeda Pharmaceutical. The agreement comes more than three years after US drugmaker AbbVie scrapped its agreed takeover of the London-listed rare disease specialist, following a clampdown on tax inversion deals by the Obama administration.

As of 13:12 BST, Shire’s share price had added 3.73 percent to 4,000.00p, propping up the benchmark FTSE 100 index which currently stands 0.02 percent in the red at 7,565.55 points. The pharmco’s shares have lost more than 12 percent of their value over the past year, as compared with about a 3.6-percent gain in the Footsie.

Shire agrees deal with Takeda

Shire and Takeda announced in a statement today that they had reached agreement on the terms of a recommended offer for the London-listed company, representing £49.01 per Shire share and valuing the rare disease specialist at about £46 billion. Shareholders in the UK group will hold about 50 percent in the enlarged drugmaker following completion of the deal, which is slated for the first half of next year. Shares in the company will be listed  on the Tokyo Stock Exchange and the Local Japanese Stock Exchanges, with Takeda also set to apply for its American Depository Shares to be listed on the NYSE.

Analysts on rare disease specialist

Liberum Capital reiterated its ‘hold’ rating on Shire today, while Berenberg Bank continues to see the rare disease specialist as a ‘buy’. Shore Capital, which also has a ‘buy’ rating on the group, meanwhile lowered its valuation on the shares from 4,025p to 3,856p. According to MarketBeat, Shire currently has a consensus ‘buy’ rating and an average price target of 4,585.75p.

As of 13:52 BST, Tuesday, 08 May, Shire PLC share price is 4,017.00p.

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