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Takeda Nears Deal to Buy Shire in Its Biggest Purchase

Updated on
  • Shire seeks increase in cash component of 46 billion-pound bid
  • Drugmakers could announce agreement as early as Tuesday

Takeda Ramps Up Takeover Ambitions

Takeda Pharmaceutical Co. is nearing an agreement to buy rival drugmaker Shire Plc, people familiar with the matter said, in what would mark the biggest ever takeover by the Japanese company.

A deal agreement could be announced as early as Tuesday, the deadline set by U.K. regulators for Takeda to make a firm offer for Shire, according to the people, who asked not to be identified because the information is private.

Recent negotiations have centered on the structure of the potential transaction, with Shire seeking an increase in the cash component of Takeda’s 46 billion-pound ($64 billion) bid, the people said. It wasn’t immediately clear if Takeda had consented to the request.

Takeda said in a statement Tuesday morning it is continuing discussions with Shire, and will make an announcement if it “makes a firm offer and reaches any agreement in due course.”

Takeda reached a preliminary pact with Shire last month after offering the equivalent of about 49 pounds a share, including 27.26 pounds in stock and 21.75 pounds in cash. That’s a 60 percent premium to Shire’s closing price on March 27, before Takeda disclosed its takeover interest.

Negotiations are ongoing, and an agreement could still be delayed, the people said. Takeda has also held preliminary talks with potential advisers about divestitures it may pursue if the Shire takeover is successful, according to the people.

A Shire representative declined to comment.

Chief Executive Officer Christophe Weber is steering Takeda into its largest-ever transaction to replenish the drugmaker’s pipeline of medicines with promising treatments for rare diseases such as hemophilia -- a field that’s lured many pharmaceutical companies lately because they can charge more for unique life-saving drugs than for routine treatments.

Takeda could face a multiple-step credit downgrade due to a “spike in leverage” if its proposed acquisition of Shire goes ahead, Moody’s Investors Service said last month.

The Japanese company’s shares rose as much as 1.3 percent in early Tokyo trading Tuesday. The stock has lost 19 percent since Takeda disclosed its interest in Shire, while the U.S.-based company has rallied 26 percent.

— With assistance by Lisa Du, Maiko Takahashi, and Cynthia Koons

(Updates with Takeda statement in fourth paragraph.)
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