Yesterday, a bidding war looked briefly like it could break out for Shire, which has rejected multiple bids from Takeda and was also confirmed to be in discussions with Allergan.
Shares in the Ireland-based but London-listed company leaped yesterday after Allergan’s announcement, and after Takeda confirmed that Shire has rejected its latest offer of £46.50 per share in cash and new Takeda stock.
Allergan has until 17 May to make a formal bid for Shire or bow out for six months under UK takeover rules for public companies, but after a fall in its own share price yesterday Allergan said it didn’t intend to make a formal offer. Meanwhile, Takeda will have to make a decision whether to continue with its pursuit of the company by 25 April.
Rare disease specialist Shire issued its own statement, noting that Takeda had made three approaches, starting with a £41bn overture on 29 March and followed by a £43bn bid on 11 April and the latest £44bn ($62bn) bid two days later. It said Shire shareholders would own 51% of the merged company after the takeover.
Shire’s board of directors rejected the bid saying it “significantly undervalued the company, its growth prospects and pipeline”, but noted it has asked its advisors to discuss whether “a further, more attractive, proposal may be forthcoming and to understand the basis on which such a proposal would be made”.
Takeda acknowledged that negotiations are still ongoing with Shire but insisted that it will “remain disciplined with respect to the terms of any such offer”. The process has no doubt been complicated by Shire’s agreement earlier this week to sell its oncology assets to Servier for $2.4bn.
Allergan – also headquartered in Ireland – is no stranger to the M&A game having been bulked up by serial acquisitions in recent years, including a $66bn merger with Actavis in 2014 that has since been followed by at least 18 other bolt-on buys or divestments to bolster and refine its product portfolio and pipeline.
The specialty pharma group said earlier this year that it planned to cut its workforce by more than 5% – culling around 1,000 jobs and leaving another 400 vacancies unfilled – in a bid to reduce costs as it faces tougher competition for dry eye treatment Restasis, its second-biggest product after Botox.
The company’s CEO and serial dealmaker Brent Saunders said recently that the group was looking into a range of business development options after buying back a large tranche of its shares last year, and in its latest statement said that process would continue.
Shire was recently tipped as the next big pharma takeover, in part because of pipeline troubles and its share price has been depressed following its $36bn takeover of Baxalta in 2016, largely on investor concerns that its haemophilia business will come under pressure from new products such as Roche’s Hemlibra (emicizumab).
AbbVie offered $55bn for the biopharma in 2014, but the transaction was abandoned after the US introduced new measures to discourage tax inversion deals.