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Shire hires adviser on takeover threat

Reports suggest it could be the latest Irish pharma company to be acquired

Shire has retained investment bank Lazard as a financial adviser to help it handle a possible takeover bid, according to reports.

An article on the Sunday Times website yesterday suggested that a bid for Shire may be in the offing in the wake of earlier deals involving fellow Irish pharma companies Elan and Warner Chilcott, which have both been snapped up in the last few months.

Perrigo paid $8.6bn to secure Elan, just ahead of the $8.5bn offered by Actavis for Warner Chilcott in May, with both companies suggesting that Ireland's company-friendly tax environment was a factor in the transactions.

The rumour mill perennially links Shire to possible takeovers, but if confirmed it could be telling that the firm has asked Lazard to help it formalise a defense. 

The Irish company received an informal approach from Bristol-Myers Squibb earlier this year, says UK newspaper the Sunday Times without citing sources, and it has also been linked in the past with AstraZeneca. 

Reports in May suggested BMS was considering a $16.75bn bid for Shire, with the company interested not only in its current portfolio of rare disease and attention-deficit hyperactivity disorder (ADHD) treatments, but also a somewhat under-appreciated pipeline with nine projects in phase III and a further six in phase II.

The company's new chief executive Flemming Ornskov, who took over on the retirement of former CEO Angus Russell at the end of April, looks set to continue the acquisitive approach of his predecessor, saying it remains "a core and continued focus of the Shire strategy". 

He has already indicated he wants to bolster the company's rare disease business, which was created by the takeover of Transkaryotic Therapies in 2005, and said recently that two or three deals were in the advanced stage of negotiations.

Ornskov also said recently he does not want to extend a £500m share repurchase programme and that has led some analysts to suggest additional acquisitions are in the offing. Expanding the programme would however be one means of defending against an unwanted takeover. 

The rumoured takeover comes in the wake of buoyant second-quarter results for Shire, after it missed its targets in the first quarter of the year, prompting the company to upgrade its 2013 guidance.

20th August 2013

From: Research, Sales

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