said Friday it had made a sweetened proposal to buy
PLC after its three previous bids for the rival drugmaker that has drawn broader interest across the sector were rejected.
The Japanese company proposed £47 a share for Shire, valuing it at £42.83 billion ($60.3 billion), marginally higher than the £46.50 it said it had offered Thursday. But at £21 a share in cash and £26 a share in equity, the proposal represented a higher proportion in cash.
The proposal, which Takeda said didn’t constitute a firm offer, represents a premium of more than 50% to Shire’s value before reports of the Japanese company’s interest first surfaced last month.
“The Board of Shire is considering its position with respect to the fourth proposal and will issue a further announcement in due course,” the company said Friday in a statement.
Friday’s announcement came after a frenzy of interest in Shire Thursday, when News of Takeda’s offer, which Shire said undervalued the company, was followed by a disclosure from Dublin-headquartered
PLC that it too was considering making an offer. After Allergan’s shares fell sharply, the company said it wouldn’t bid after all.
A deal would mark Takeda’s biggest-ever acquisition, creating a global drug giant with sales of about $30 billion a year. However, the Japanese company would likely have to take on significant debt to fund it. At roughly $50 billion, Shire’s market value is more than $10 billion higher than Takeda’s.
Cheap funding rates in Japanese yen would make that more palatable, but the company is still digesting borrowings it took on for previous acquisitions. Although Takeda’s net debt is now a manageable 1.8 times earnings before interest, taxes, depreciation and amortization, that would likely balloon if it has to borrow for the Shire deal.
Shares in Shire closed down 3.9% at £38.22 Friday. Earlier in the day, Takeda shares had closed 4.7% lower.
Takeda, whose products include heartburn treatment Dexilant, said late last month it was considering a bid for Shire to strengthen its new-drugs portfolio and broaden its international footprint. Takeda has made several large acquisitions under Chief Executive
and his predecessor, including a $4.7 billion agreement last year to buy Cambridge, Mass.-based Ariad Pharmaceuticals, the maker of the leukemia treatment Iclusig.
Shire is best-known in the U.S. for its attention deficit hyperactivity disorder drug Adderall, but it has more recently developed into one of the world’s biggest makers of drugs for rare diseases, expanding quickly under the leadership of Chief Executive
The pharmaceutical industry has been a hotbed of deal activity recently as companies look to consolidate amid various industry headwinds. Last month,
PLC said it would pay
$13 billion for its 36.5% stake in their consumer health-care joint venture. In January, France’s
said it would buy hemophilia drugmaker Bioverativ Inc. for more than $11.5 billion.
Shire has regularly been involved in deal talks in recent years.
In 2014, a $54 billion takeover of Shire by Illinois-based
was called off because of new U.S. tax rules aimed at deterring American companies from moving their legal headquarters to lower-tax countries.
Under Takeda’s proposal Friday, the company would maintain its headquarters in Japan and its primary listing on the Tokyo Stock Exchange, but it would put in place a New York-listed American depositary receipt program to allow current Shire shareholders to continue to hold shares in the combined company.
Under U.K. rules, Takeda has until April 25 to formalize its offer, withdraw it or walk away.
—Ben Dummett contributed to this article.
Write to Noemie Bisserbe at [email protected]
Source : WSJ