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Allergan Says It In Early Stages Of Considering Possible Offer For Shire

20 April 2018

Later on Thursday, Allergan CEO Brent Saunders chose to drop his pursuit of 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, also based in the Irish capital, said its interest was in the "early stages".

Earlier today, Japan's Takeda Pharmaceutical Co. The firm has said it could become acquisitive and is looking at strategic options. It emerged Thursday that the Japanese drug giant has made three separate offers to acquire Shire, the last of which amounted to about $60 billion in stock and cash, but Shire said it has rejected all three offers. This prompted both companies to confirm the move and announce that Shire had rejected it, although their negotiations are continuing. The Japanese firm has been looking to grow overseas amid patent expirations and a shrinking domestic population.

Shire has been under pressure in the last 12 months, with its shares down by a third before Takeda's interest was made public, due to greater competition from generic drugs and debts from its $32 billion acquisition of Baxalta in 2016.

But it would be a big financial stretch since Shire, with a market value of more than 34 billion pounds ($48.3 billion), is worth a lot more than Japan's biggest drugmaker.

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In addition to making medications like Adderall and Vyvanse, Shire focuses on rare diseases like the blood disorder hemophilia.

"Irrespective of the outcome of discussions between the two parties", Takeda added, "Takeda remains well-positioned to continue its transformation, delivering portfolio growth while strengthening its pipeline and boosting profitability".

In each case, Shire's board determined the bid "significantly undervalue" the firm's growth prospects and pipeline. "Furthermore, 62% of the consideration is as new Takeda shares, with US and Japan listings, raising the value risk", he wrote.

Under the proposed deal, Shire shareholders would own 51% of the enlarged the group.

Shire revealed Thursday morning that Takeda made an offer worth £41 billion on March 29, upped that offer again to £43 billion on April 11, and then came in with an offer of £44 billion (approximately $62.5 billion) on April 13.

Allergan Says It In Early Stages Of Considering Possible Offer For Shire