Shire shares have surged following a report that Allergan is considering a bid for the drugmaker to compete with Japan’s Takeda’s $63bn (€50.9bn) offer.
The pharmaceutical industry has seen a surge in deal-making this year as large players look for promising assets to improve their pipelines, but a Takeda-Shire transaction would be by far the biggest yet.
Two of the three pharma giants potentially involved have major operations in Ireland. London-listed Shire employs hundreds of people between a Co Meath campus and its head office in central Dublin, while Allergan’s anti-wrinkle Botox plant in Westport in Mayo and a European office in Dublin employs about 1,000 people.
Takeda has offered £46.50 (€53.50) a share in cash and shares for Shire in a bid to extend its global reach. Shire said its board and advisers found the offer “significantly undervalue the company and Shire’s growth prospects and pipeline,” though it’s willing to keep negotiating.
Allergan would face several obstacles to get a deal done. The company had about $30.1bn in debt and $6.45bn in cash at the end of the year, and in February, Allergan chief executive Brent Saunders said the company had bought back $15bn shares while instituting a dividend and paying down some of the debt.
In March, Mr Saunders told investors the company was “open for business, if you will, in terms of relooking at everything”.
Takeda would need to raise large amounts of capital to buy Shire, which has a bigger market valuation than the Japanese firm drugmaker.
Shire shares rose 8.6% in London. Under takeover rules, Takeda has until next week to make an offer or walk away, after it initially expressed interest in Shire last month.
Reuters, Bloomberg, Irish Examiner