Shire directors have agreed a takeover offer from Japan's Takeda Pharmaceutical in a mix of cash and shares
that values the FTSE 100 biotech at roughly £46bn.
Shareholders of the Dublin-based company will be entitled to receive $30.33 cash per share plus either 0.839 new Takeda shares or 1.678 Takeda American Depositary Receipts. The deal, which will see Shire shareholders own 50% of the combined group, had been valued at £49 per share based on Takeda's share price on 23 April but with a 14% drop since the start of April, the latest closing price of ¥4,535 has since fallen to give a value of £48.17 per share.
A fortnight ago, Shire's board said it would be willing to recommend the deal, subject to certain conditions, inlcuding completion of a confirmatory due diligence by Takeda.
On Tuesday, Takeda stated that following the acquisition it intends to "de-lever quickly" and confirmed that up to three Shire directors will join the Takeda board after completion of the deal.
As a result, both companies' directors intend to unanimously recommend that their shareholders vote in favour of the takeover at to-be-arranged general meetings.
Shire chair Susan Kilsby said: "We firmly believe that this combination recognizes the strong growth potential of our leading products and innovative pipeline and is in the best interests of our shareholders, our patients and the communities we serve."
Chief executive Flemming Ornskov added that Shire's portfolio and pipeline will ensure the combined group "is in the best interests of shareholders and offers an opportunity to improve the lives of even more patients globally with rare and highly specialised conditions".
Christophe Weber, CEO of Takeda, said: "Since its inception, Takeda has transformed into an agile, R&D-driven global pharmaceutical company that is well-positioned to deliver innovative and transformative care to patients around the world. Shire's highly complementary product portfolio and pipeline, as well as experienced employees, will accelerate our transformation for a stronger Takeda.
"Together, we will be a leader in providing targeted treatments in gastroenterology, neuroscience, oncology, rare diseases and plasma-derived therapies. We are looking forward to the benefits this combination will bring to patients worldwide, the opportunities it will bring for our employees and the returns it will deliver for our shareholders."
Shire shares, which in recent weeks have seemed to reflect little investor enthusiasm for the deal, popped up 5% to 4,041.5p on Tuesday morning.
Analysts at Shore Capital said: "While we acknowledge the consideration as including the part receipt of Takeda equity, given the absence of predictable catalysts over the next 12 months to close the fundamental valuation gap in our view, we see the current proposed offer as offering reasonable value to shareholders over this time frame."