M&A

Bidding war erupts for Shire as Takeda is stiff-armed on a $62.5B offer and Allergan jumps in

A bidding war for Shire $SHPG has erupted.

Shire has rejected three separate bids from Takeda in recent weeks, including a third offer valuing the company at $62.5 billion. And right on the heels of a statement from Shire, Allergan announced it is now getting into the act and starting takeover talks with Shire.

Brent Saunders

Allergan $AGN CEO Brent Saunders — a top dealmaker in biopharma — evidently wants to see if he can pull off the kind of major M&A move that would transform his company as well. Meeting the rules of a UK-related takeover, Allergan says it has made no offer but will have to declare its intentions by May 17.

In a statement released Thursday morning, Shire said that Takeda had started the bidding March 29 at £28 per share in new Takeda shares with £16 per share in cash, or a total of £44. By the third offer on April 13 that had edged up to £28.75 per share in new Takeda shares and £17.75 per share in cash worth a total of £46.50 a share, or £44 billion ($62.5 billion).

Shire’s shares shot up 8% as the news circulated.

Shire has rejected all of the offers as insufficient, but it also dispatched its representatives to Takeda to see if they were willing to come up with something that might be acceptable. The latest deal would give Shire shareholders 51% of the equity in a newly merged company. In a statement, Shire noted:

Following the Board meeting on 14 April 2018 which rejected the Third Proposal, at the Board’s request Shire’s advisers entered into a dialogue with Takeda’s advisers to discuss whether a further, more attractive, proposal may be forthcoming and to understand the basis on which such a proposal would be made.

Flemming Ornskov

Takeda signaled to the markets earlier that it was interested in mounting a takeover of Shire, which responded by selling off oncology assets in an attempt to make itself less appealing. Takeda, though, shows plenty of eagerness as CEO Christophe Weber seeks to transform the company into a global player with a major R&D center in the Boston/Cambridge area.

Shire CEO Flemming Ornskov, meanwhile, has been the subject of some brutal analyst reviews as investor discontent over the financial direction of the company in the wake of the Baxalta buyout and some major advances by rivals for its franchise therapies.


Image: Christophe Weber, Takeda CEO. AP IMAGES


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Director, Financial Planning and Analysis
Molecular Templates Austin, TX
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Molecular Templates Austin, TX
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Koneksa Health New York, NY

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