The drugs company Shire is at the centre of a multibillion-pound takeover battle after the Botox-maker Allergan emerged as a rival suitor to Japan’s Takeda, which is also hoping to clinch a deal.
Shire, which makes the ADHD drug Adderall and focuses on rare diseases, was the top FTSE 100 riser on Thursday after Allergan said it was considering making an offer. Shares rose nearly 6%.
It followed Takeda’s revelation that although the board of Shire had rejected a £44bn offer, talks with the company were “ongoing”.
Allergan, a global company listed in New York and with its headquarters in Dublin, said it was in the early stages of considering a possible offer for Shire.
It added: “No offer has been made. There can be no certainty an offer will be made nor as to the terms on which any such offer would be made. A further announcement will be made as appropriate.”
Later on Thursday, Allergan Chief Executive Brent Saunders decided to drop his pursuit of London-listed Shire after receiving pushback from some of his shareholders, who were concerned about the company overstretching its resources, according to people familiar with the matter, who asked not be identified discussing confidential talks. Allergan then issued a second announcement stating it did not intend to make an offer for Shire.
It is the latest twist in the battle to take control of Shire after Takeda said at the end of March it was considering making an offer. Updating the market on Thursday, the Japanese firm revealed Shire’s board had rejected its offer, which was equivalent to £46.50 a share.
Shire responded with its own statement saying that the board had considered three separate offers from Takeda, unanimously rejecting them all on the grounds that they “significantly undervalue the company and Shire’s growth prospects and pipeline”.
However, Shire suggested it would be willing to consider an improved offer: “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.
“The board and management of Shire remain committed to enhancing shareholder value and are focused on fully evaluating internal and external opportunities to maximise value for shareholders, including any further proposals from Takeda.”
Shire was founded in Basingstoke, Hampshire, in 1986, but the company has scaled back its presence in the UK and most of its operations are in the US. It has its headquarters in Dublin for tax purposes but is mainly from Boston.
Takeda is focused on expanding overseas and initially said an acquisition of Shire would allow it to grow in its core areas of oncology, gastrointestinal and neuroscience. However, Shire announced on Monday that it was selling its oncology business to the French firm Servier for $2.4bn (£1.7bn).
“Shire’s latest refusal, as well a deal to offload its oncology division, a prize asset that would have been complimentary to Takeda’s portfolio, could be the final nail in the coffin of the merger,” Jasper Lawler, head of research at London Capital Group, said.
