Market speculation gathers pace over Takeda buyout offer for Shire

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Shares in London-listed drugmaker Shire have soared today after reports that it has rejected a £42.4bn ($60bn) takeover offer from Japan's Takeda.

"We think that Takeda's recently expressed interest in Shire may flush out other potential bidders, most likely among the USA pharma heavyweights including Pfizer, Amgen and AbbVie", analysts at United First Partners said in a note, as quoted by Bloomberg.

Shire's board has unanimously rejected all three approaches because the offers significantly undervalued the company and its growth prospects.

Allergan confirmed that it sent his shares 7 percent down considering an offer for Shire on its interest.

Under takeover rules, Allergan has until 5pm on 17 May to either make a firm offer or walk away. BNP Paribas reiterated an "outperform" rating and set a GBX 4,700 ($67.30) price objective on shares of Shire in a report on Thursday, March 22nd. Shire would bring new assets in gastrointestinal diseases and nervous-system ailments, and key treatments in the late stages of testing. This bold deal will lead to significant boost in Takeda's position in rare diseases, neuroscience and gastro intestinal.

Shire makes eye care drugs that are still patent-protected.

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Allergan shares fell 3.4 per cent to $159.97 in NY this morning.

Bernstein analyst Wimal Kapadia said Shire was likely to be pushing for a larger cash component in current talks but Takeda was already stretched, suggesting the chances of a deal being consummated were still "reasonably risky". The first valued Shire at up to £44.00 per share, the second was £45.60 and the third was £46.50.

"We think that Takeda's recently expressed interest in Shire may flush out other potential bidders, most likely among the USA pharma heavyweights including Pfizer, Amgen and AbbVie", analysts at United First Partners said in a note. Speculation about a Shire-Takeda merger has been swirling since late March.

Based on Takeda's market capitalization, Shire shareholders would end up owning approximately 51 percent of the enlarged group, Shire noted.

"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", it said. SHPG hit $175.57 during the last trading session after $13.03 change.Shire plc has 3.48 million shares volume, 164.84% up from normal.

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