Takeda Pharmaceutical has entered into a loan credit agreement to help fund its acquisition of Shire (LON:SHP), the Japanese company has said. The $62-billion tie-up, agreed earlier this year, however is still pending shareholder approval.
Shire’s share price has slipped into the red in today’s session, having given up 0.80 percent to 3,977.00p as of 13:29 BST. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.10 percent lower at 7,696.51 points. The group’s shares have lost more than eight percent of their value over the past year, as compared with about 3.4-percent gain in the Footsie.
Takeda-Shire deal update
Takeda announced in a statement today that had entered into a term loan credit agreement for an aggregate principal amount of up to $7.5 billion with several global financial institutions including JP Morgan Chase, Sumitomo Mitsui, MUFG and Mizuho Bank. The pharma group noted that majority of the funding has been committed by Japanese institutions. The proceeds from the agreement will be used to fund a portion of Takeda’s cash consideration for its recommended cash-and-share offer for Shire.
“We are pleased to have secured the term loan facility […] as we continue to make progress toward completing our proposed acquisition of Shire,” Costa Saroukos, chief financial officer of Takeda said in the statement. The Japanese group, however, has faced pressure over the deal, with some investors claiming that it “carries overly high risks to the company” given its size.
Analysts on FTSE 100 pharmco
As of June 1, the consensus forecast amongst 19 polled investment analysts covering Shire for the Financial Times has it that the company will outperform the market. According to MarketBeat, the London-listed rare disease specialist currently has a consensus ‘buy’ rating and an average price target of 4,600.75p.