Japan's Takeda clinches $62B Shire deal

09 May, 2018, 01:15 | Author: Angel Logan
  • Thomas Dittrich

Takeda Pharmaceutical Co. of Japan has finalized an agreement to buy Shire PLC, the second-biggest biotech employer in MA, for $62 billion in the largest-ever global takeover by a Japanese company.

Shire investors will receive $30.33 in cash and either 0.839 new Takeda shares or 1.678 Takeda ADSs for each share, the companies said, valuing the offer at £48.17 a share based on the latest price and exchange rate. If the deal closes, Shire shareholders will own around half of the combined business. It represents a 60% premium to the share price low from before Takeda confirmed its interest in a buy, he wrote in a Tuesday note to clients.

In a separate statement, Takeda said it would fund the deal with a bridge loan facility of almost US$31 billion.

Up to three Shire directors will join the board when the deal is completed and Takeda will retain the services of key staff, including Shire CEO Flemming Ornskov, who will get 200 percent of his 2018 annual salary and target bonus.

Shire has profitable businesses selling drugs for hyperactivity and rare disorders but the size of the deal will make Takeda one of the most indebted drugmakers, prompting Standard & Poor's to warn of a potential credit downgrade. The Irish company sells about 40 kinds of drugs in more than 100 countries, and its sales are also high in the United States - the world's largest pharmaceutical market.

Takeda had previously said that expanding its oncology business was a significant reason why it was considering a bid for Shire, along with the desire to expand in along with gastrointestinal medicine and neuroscience.

In particular, Shire would give Takeda access to research and development in fields the Japanese firm has long sought, including digestive systems, mental illness and rare diseases. The Tokyo-listed pharmaceutical company's stock dropped 1.7% to 4,460 yen on Monday, a third straight fall session. Takeda was already Asia's largest drug maker.

The acquisition would "strengthen Takeda's core therapeutic areas, bringing together complementary positions in gastroenterology and neuroscience, and provide leading positions in rare diseases and plasma-derived therapies", it added. Previous year it bought Ariad Pharmaceuticals of Cambridge, Massachusetts.

Takeda said the integrated company will be headquartered in Japan, listed in both Tokyo and NY, will expand its R&D presence in the Boston, US, area, and have major regional locations in Japan, Singapore, Switzerland and the US. The initial offer was $59.42 (44 pounds) per share which the Shire outright rejected terming it as undervaluation.

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