Takeda shares drop after Shire rejects $63 billion offer

Japan’s Takeda Pharmaceutical Co Ltd shares fell on Friday after rare disease drug maker Shire Plc rejected its $63 billion cash-and-stock acquisition offer.

Shire said it had received three conditional proposals from Takeda, but said they significantly undervalued the company’s growth prospects and drugs in development. Discussions between Takeda and Shire are still ongoing, the two companies said.

A successful bid by Takeda would be the most radical step yet by its French chief executive Christophe Weber to propel the Japanese company into the top ranks of global drugmakers and would be Japan’s largest ever outbound deal.

Botox maker Allergan Plc also said it was considering an offer for Shire before reversing course on pursuing a rival bid.

Takeda’s most recent rejected offer of 46.50 pounds a share for Shire was made on April 12 and comprised 17.75 pounds in cash, which would be paid in U.S. dollars, and 28.75 pounds worth of new Takeda shares.

Its shares were down 2 percent in morning trade.

Many analysts think Takeda will need to substantially raise the cash component to make the offer attractive to Shire shareholders.

But it would be a big financial stretch since Shire, with a market value of more than 36.6 billion pounds ($51.5 billion), is worth a lot more than Japan’s biggest drugmaker, which has a market capitalization of 4 trillion yen ($37.2 billion).

Under UK takeover rules, Takeda has until April 25 to make a firm offer or walk away.

(REUTERS)