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Scfc, I agree with you. To suggest that Takeda are only now starting to talk to its banks, shareholders and BoD is farcical and written by people who have not worked in large Plcs. From my own experience of working on M&A deals with plcs, the amount of work leading up to any announcement is vast and includes all related parties. The funding structure would have been modelled to death and stress-tested. Major shareholders would have been spoken to. The whole BoD would be aware. These stories are merely page fillers when there is nothing concrete to talk about. What they are not, is news!
Or takeda can now justify making a lower offer ;-)
Shares in biotech firm Shire have risen 1.5% after the company said it had agreed to sell its Oncology business. The sale of the unit - to French firm Servier for $2.4bn - could put off Japan's Takeda from making a takeover bid for Shire. The oncology unit is one of the businesses that Takeda is particularly interested in getting its hands on. Under UK takeover rules, Takeda has until 25 April to decide whether it is going to make a bid for Shire.
Redtom, and of course, it now gives them an easy ‘get out case’ if they so wish, as they wouldn’t be buying what they initially thought. What we can all learn from this is that none of us (including those writing those speculative articles) actually know and any leaking or profiting from so called insider info is simply not allowed! My reading of FO’s statement is that he is just carrying on and not getting sidetracked by all the speculation. I think it’s amusing when we hear quotes that Takeda are speaking to its major bankers (last week) and now their major shareholders (this weekend). What do people think they would be doing, ignoring all its major stakeholders!?! Hardly news...ATB, Scfc
This would not have been public knowledge. I'm almost certain that Takeda would not have known. Shire would have been keen to get this signed as it forms a major part of their defence against this hostile potential bid. Takeda will have to re-think their strategy given a major asset has gone.
Was this disposal public knowledge since end of 2017? If so, takeda would have known about it also and yet they go on to suggest they are intrested in buying shire... Its either a big joke by Tekeda or they seriously think shire is worth buying.
Putting aside the implications to the Takeda situation, the Oncology sale is a great deal. Cash receipt of $2.4bn. Cash = good news. Sold at 9.2 times turnover = That is a high multiple. Sold at 17+ times EBITDA = Very good value for Shire. I don't normally have many good words to say about FO, but he has done a good deal here.
Scfc, Yes, this is the nail in the coffin as far as Takeda is concerned. They will not make a bid given that the Oncology part was in their first line as to why they were considering a bid. In that same line was Neuroscience and it seems this will need to be spun out to fund the deal. There is not a 'cat in hell's chance' chance for Takeda to make a bid now. SP starting to drift as the market starts to realise this too.
It is referred to as a definitive agreement and hence is mutually binding on both parties.. I read this more as ‘business as usual’ as the process started on the sale at the end of 2017. It is also interesting this is one of the areas Takeda highlighted as a reason for its potential acquisition. Scfc
"The proceeds from the transaction increase optionality and Shire's Board will consider returning the proceeds of the sale to shareholders through a shareholder-approved share buyback after the current offer period regarding Takeda's possible offer for Shire concludes." I missed this when writing my first comment. Quite unusual when they have so much debt. Trying to sweeten shareholders with a fat carrot given the Takeda situation.
Transaction details Under the terms of the agreement, Servier has agreed to acquire Shire's Oncology business for a total consideration of $2.4 billion, in cash, upon completion. In 2017, the Oncology business generated revenues of $262 million. The total consideration represents a revenue multiple of 9.2 times 2017 revenues. The transaction covers the transfer of Shire's Oncology business including in-market products ONCASPAR� (pegaspargase), a component of multi-agent treatment for acute lymphoblastic leukemia (ALL) and ex-U.S. rights to ONIVYDE� (irinotecan pegylated liposomal formulation), a component of multi-agent treatment for metastatic pancreatic cancer post gemcitabine-based therapy. The portfolio also includes Calaspargase Pegol (Cal-PEG), which is under FDA review for the treatment of ALL, and early stage immuno-oncology pipeline collaborations. The gross assets that are the subject of the transaction are approximately $1.6 billion and the profits attributable to the assets being transferred are approximately $140 million, excluding depreciation, amortization and other direct and indirect costs. Transaction closing This transaction constitutes a Class 2 transaction for the purposes of the U.K. listing rules and, as such, Shire shareholder approval is not required. The transaction has been approved by the Board of Directors and is expected to close in the second or third quarter of 2018. Transaction background Shire's Board of Directors initiated the potential divestment of the Oncology business in December 2017. The process, which commenced in January 2018, identified multiple potential strategic buyers across the U.S., Europe and Japan.
Shire Announces Sale of Oncology Business to Servier for $2.4 Billion Sale of Oncology business unlocks embedded value within Shire's portfolio and sharpens focus on core areas reinforcing our leadership in rare diseases Oncology business provides Servier S.A.S. with an immediate presence in the U.S., enhancing its commitment to addressing unmet patient needs in oncology Dublin, Ireland - April 16, 2018 - Shire plc (LSE: SHP, NASDAQ: SHPG) the leading global biotechnology company focused on rare diseases announces today that it has entered into a definitive agreement with Servier S.A.S. ("Servier") to sell its Oncology business for $2.4 billion. Shire's Oncology business includes in-market products ONCASPAR� (pegaspargase), a component of multi-agent treatment for acute lymphoblastic leukemia (ALL) and ex-U.S. rights to ONIVYDE� (irinotecan pegylated liposomal formulation), a component of multi-agent treatment for metastatic pancreatic cancer post gemcitabine-based therapy. The portfolio also includes Calaspargase Pegol (Cal-PEG), which is under FDA review for the treatment of ALL and early stage immuno-oncology pipeline collaborations. Flemming Ornskov, M.D., M.P.H., Shire Chief Executive Officer, commented: "This transaction is a key milestone for Shire, demonstrating the clear value embedded in our portfolio. While the Oncology business has delivered high growth and profitability, we have concluded that it is not core to Shire's longer-term strategy. We will continue to evaluate our portfolio for opportunities to unlock further value and sharpen our focus on rare disease leadership with selective disposals of non-strategic assets. "We are confident that Servier will continue to invest in this business and our colleagues who are expected to transfer as part of the transaction in order to meet the needs of cancer patients globally. "The proceeds from the transaction increase optionality and Shire's Board will consider returning the proceeds of the sale to shareholders through a shareholder-approved share buyback after the current offer period regarding Takeda's possible offer for Shire concludes." Olivier Laureau, Servier Group President, commented: "The acquisition of Shire's oncology franchise enables Servier to meet its strategic ambitions to become a global key player in oncology. As an essential step in the evolution of the Group, this acquisition allows us to establish a direct commercial presence in the United States, the world's leading pharmaceuticals market, and to strengthen our portfolio of marketed products in the territories where Servier is already present. Our goal is to bring these treatments to greater numbers of cancer patients around the world. We thoroughly look forward to welcoming Shire's oncology teams who will join Servier after the closing." Transaction details Under the terms of the agreement, Servier has agreed to acquire Shire's
Interesting development. Presumably pays down a little bit of the debt. But I wonder what Takeda make of this? I think they are big into Oncology?
Reports are the price drop today was due to takeda and shire being at an impasse over price.
Why??? Currently down c4% on the Nasdaq in USA. Scfc
closing price of 36+ is actually a positive thing
yes drop was sudden and got me thinking also. But it may just be someone who doesn't want to be in it over the weekend or someone who met their target and/or saw better day trade opportunity in another stock so they just switched...
This wasn't day trading. This was a very sudden drop with volume. This was very unusual. I'm very suspicious of this so close to 'announcement'. Could be one this weekend.
I sold half my shares yesterday at just under £37 (nearly break even point for me) . If the deal does not happen I may buy them back and wait for another takeover Bidder. If it happens I will have some profit.
The idea that it was sounding out several banks (only now?) to lend it tens of $bn when it was only valued at c$37bn just seemed strange to say the least. The £ has also strengthened about c4% since Feb and Takeda’s own SP is down by over 25% this year alone. All these factors seemed to make any deal less likely but until any announcement is made either way we are all of course still guessing. Last 15 minutes of trading today will be interesting ...ATB, Scfc
Or maybe it is just the nature of d beast. Ride this mare and enjoy, I say
Or just being day traded.... 2 weeks a long time.
Perhaps something has leaked?? Or the banks have said no ?? Or the takeda board have spoken ?? Or maybe a rival bid has been ruled out ?? :)))