Shire share price: ShoreCap sees Takeda deal as ‘reasonable value’

Analysts remain bullish on London-listed rare disease specialist

Shire share price: ShoreCap sees Takeda deal as ‘reasonable value’

Shore Capital argues that Takeda’s £46-billion takeover offer for London-listed rare disease specialist Shire (LON:SHP) is ‘reasonable value,’ Citywire reports. The comments came as the analysts reiterated their ‘buy’ stance on the FTSE 100 group.

Investors hailed the takeover deal yesterday, sending Shire’s share price rallying 4.63 percent to 4,034.50p in the previous session. This morning, the stock has headed south, having given up 0.76 percent to 4,004.00p as of 08:08 BST, underperforming the broader UK market, with the benchmark FTSE 100 index having climbed into positive territory and currently standing 0.44 percent higher at 7,599.33 points.

‘Reasonable value’

Shore Capital reiterated its ‘buy’ recommendation on Shire yesterday after the UK rare disease specialist reached a tie-up deal with Takeda which values the rare disease specialist at £46 billion.

“The deal represents a 56.2% premium to Shire’s 30-day trading day volume-weighted average and values the group at £46 billion,” the broker’s analyst Tara Raveendran commented, as quoted by Citywire, adding that after the deal closes, shareholders in the FTSE 100 group will end up owning about 50 percent of the enlarged drugmaker.

“While we acknowledge the consideration as including the part receipt of Takeda’s equity, given the absence of predictable catalysts over the next 12 months to close the fundamental valuation gap, we see the current proposal offer as offering reasonable value to shareholders over this timeframe,” Raveendran pointed out.

Rating update

As of May 4, the consensus forecast amongst 19 polled investment analysts covering Shire for the Financial Times has it that the company will outperform the market. The FTSE 100 group updated investors on its first-quarter performance last week, posting a rise in sales, driven by strong performance at the pharmco’s rare disease unit, which helped offset a decline in the company’s neurosciences division. 

As of 08:12 BST, Wednesday, 09 May, Shire PLC share price is 4,009.70p.

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