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Takeda rebels take aim at Shire acquisition

Shareholder group concerned about $30bn debt burden

Opposition to Takeda’s yet-to-be-finalised $63bn takeover of Shire appears to be building among some shareholders in Japan.

A small but increasingly vocal group of rebel investors – including members of the Takeda family who founded the company – are arguing that absorbing Shire would be damaging, mainly because of the large amount of debt needed to finance the deal and a clash in corporate cultures.

Takeda is taking on a $30bn bridging loan and said recently it would have to sell its Osaka headquarters to help finance the deal, and has seen its share price decline sharply since news of the offer first emerged in the spring. According to a Sunday Times article, a group of shareholders working under the Thinking about Takeda’s Bright Future (TTBF) banner are trying to mobilise support among retail investors to scupper the deal.

CEO Christophe Weber – the first non-Japanese executive to hold the reins at Japan’s biggest drugmaker – is adamant that absorbing Shire will help Takeda grow outside Japan and enrich the company’s pipeline. He also thinks he can save $1.4bn in annual sales, marketing and R&D costs from the combined company.

Christophe Weber

Christophe Weber

Weber has already taken steps to solve Takeda’s biggest problems of a lacklustre pipeline and patent expiries on big-selling brands with aggressive international expansion and a series of bolt-on acquisitions and licensing deals, including the $5.2bn takeover of cancer company Ariad Pharma.

In the meantime, no date has been set for a vote on the Shire takeover among Takeda’s voting shareholders, who will have to back the plan by a three-quarters majority for it to go ahead.

The rebels remain a small force – likely a single-digit percentage of total shareholders – and have already suffered one defeat. At Takeda’s annual general meeting in June they failed to push through a proposal that would have made it necessary for Takeda to secure shareholder approval in advance for acquisitions over 1 trillion yen ($9bn).

At the time, local news sources suggested that the group managed to get 10% support despite only representing 1% of voting shareholders, but it will have to become much more persuasive to stand a chance of blocking the Shire takeover.

Article by
Phil Taylor

11th September 2018

From: Marketing

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