Takeda nears Shire deal with $64bn offer

Bloomberg

Takeda Pharmaceutical Co. reached a preliminary agreement to buy Shire Plc with a sweetened takeover offer of about $64 billion, closing in on a takeover that would vault it into the ranks of the world’s top pharma companies.
The UK-listed company’s board said it was willing to recommend the latest offer to shareholders, and the companies got more time from regulators to complete a deal, Shire and Takeda said in separate statements. Takeda slumped the most in almost five years, tumbling 9.3 percent in Tokyo trading.
A Shire takeover would rank as Takeda’s largest-ever transaction and bring the Japanese drugmaker medicines for rare diseases such as hemophilia — a field that’s luring a growing number of drugmakers because they can charge more for unique life-saving drugs than for routine treatments.
Takeda has ramped up its ambitions under CEO Christophe Weber, seeking growth overseas amid patent expirations and a shrinking domestic population.
Shire rose less than 1 percent in London trading, valuing the company at 36 billion pounds. The drugmaker’s shareholders would own half of the enlarged company under the latest Takeda proposal.
“The deal seems to be much more of a merger,” Ronny Gal, an analyst with Sanford C. Bernstein & Co. in New York, wrote in a note to clients.
Japanese investors expressed concern about the hefty debt and the possibility Shire shareholders would sell their new Takeda stock, even as the company reiterated its commitment to its investment-grade debt rating. The transaction could result in a multinotch downgrade on Takeda’s A1 rating, Moody’s Investors Service wrote in a report.
“The market is seeing this acquisition as negative,” said Mitsushige Akino, an executive officer with Ichiyoshi Asset Management Co. in Tokyo. “It is too big. Takeda might not be able to handle it.”