Takeda Pharmaceutical Co. is nearing a preliminary agreement to acquire Shire Plc after the Japanese drugmaker sweetened its roughly US$60 billion bid for the biotechnology company, according to people with knowledge of the matter.
Shire’s board “is considering its position” on a new bid, the company said in a statement Tuesday after Bloomberg News reported that the companies were nearing a preliminary agreement that could be announced as soon as Tuesday. Shares gained in late trading in New York after Reuters reported that the companies plan to announce a deal on Wednesday.
The two companies have been working on a tentative agreement on price, the people said, declining to be identified as the discussions are confidential. Under U.K. takeover rules, Takeda must announce a firm offer or abandon its pursuit by Wednesday afternoon. The companies may seek an extension from authorities to finalize talks, the people said.
Discussions this week have revolved around an improved offer, including a possible increase in the cash component, the people said. The exact terms of the offer couldn’t be immediately learned. Talks may still be delayed or fall apart, they said. Representatives for Takeda and Shire declined to comment.
Shire shares surged as much as 6.2 per cent in London, valuing the company at about 37 billion pounds (US$52 billion). Takeda has declined about 24 per cent this year, valuing the firm at about US$35 billion. In New York, Shire rose as much as 6 per cent to US$174 in late trading.
Acquiring Shire would vault Takeda, which has few late-stage experimental drugs in its own pipeline, into the ranks of the world’s top pharmaceutical companies. The Japanese company last week raised its offer to 47 pounds a share and lifted the cash portion of the bid after three prior proposals were rejected.
Friday’s proposal included 21 pounds a share in cash and 26 pounds apiece in new stock for Shire, whose market value has soared since the takeover interest was disclosed last month.
Takeda has been ramping up its takeover ambitions under Chief Executive Officer Christophe Weber, seeking growth overseas amid patent expirations and a shrinking domestic population. A Shire takeover would be by far Takeda’s largest-ever deal and bring it medicines for rare diseases such as hemophilia -- a field that’s luring a growing number of drugmakers who can charge more for unique life-saving drugs than for routine treatment.
--With assistance from Lisa Du