Shire has confirmed that it received three conditional acquisition proposals from Takeda, on March 29, 2018 (the first proposal), April 11, 2018 (the second proposal), and April 13, 2018 (the third proposal). Takeda has rejected the proposals, but says it is continuing to have discussions with Takeda. Meanwhile, Allergan confirmed that it is not making an offer for Shire.

Following an April 8, 2018 board meeting, Shire’s board unanimously rejected Takeda’s first proposal, concluding that it significantly undervalued the company, its growth prospects, and pipeline. The first proposal comprised £28 ($39) per share in new Takeda shares, to be listed in Japan and in the US through an American Depositary Receipt (ADR) listing, and £16 ($22) per share in cash, representing a potential value of £44 ($62) per share and approximately £41 billion ($57 billion) for the total issued and to be issued share capital of the company. Based on Takeda’s current market capitalization, Shire shareholders would have owned approximately 50% of the enlarged Takeda under the first proposal.

The second proposal comprised £28.75 ($40) per share in new Takeda shares, to be listed in Japan and in the US through an ADR listing, and £16.75 ($23) per share in cash, representing a potential value of £45.50 ($64) per share, a marginal increase to the first proposal, and approximately £43 billion ($60 billion) for the total issued and to be issued share capital of the company. Based on Takeda’s current market capitalization, Shire shareholders would have owned approximately 51% of the enlarged Takeda under the second proposal.

The third proposal also comprised £28.75 ($40) per share in new Takeda shares, to be listed in Japan and in the US through an ADR listing, and £17.75 ($25) per share in cash, representing a potential value of £46.50 ($65) per share and approximately £44 billion ($62 billion) for the total issued and to be issued share capital of the company. Based on Takeda’s current market capitalization, Shire shareholders would have owned approximately 51% of the enlarged Takeda under the third proposal.

The Shire Board met again on April 14, 2018 and thoroughly considered the third proposal with its advisers and unanimously rejected it, concluding that it continues to significantly undervalue the company and Shire’s growth prospects and pipeline.

Following the Board meeting in April that rejected the third proposal, at the board’s request, Shire’s advisers entered into a dialogue with Takeda’s advisers to discuss whether a further, more attractive, proposal may be forthcoming and to understand the basis on which such a proposal would be made.

Shire says its board and management remain committed to enhancing shareholder value and are focused on fully evaluating internal and external opportunities to maximize value for shareholders, including any further proposals from Takeda. Takeda says that it will remain disciplined with respect to the terms of any such offer.

Takeda said in a March 28, 2018 statement that it continuously considers options for accelerating growth, which includes options in its prioritized therapeutic areas of gastroenterology, oncology, and neuroscience. Takeda said that a possible acquisition of Shire would enhance its position in those areas as well as a provide a rare-disease product franchise, reinforce its large-molecule-focused late-stage pipeline within Takeda’s core therapeutic areas, and provide further market opportunities in the US.

In a separate announcement, Allergan said that it does not intend to make an offer for Shire. Allergan made the announcement in keeping with UK takeover rules.

Source: Shire, Takeda, and Allergan