LONDON (Alliance News) - Moody's Investor Service on Wednesday placed its Baa3 rating of FTSE 100-listed pharmaceutical firm Shire PLC under review for a potential upgrade.
This follows the decision from Shire's board to recommend that shareholders accept the offer by Takeda Pharmaceutical Co Ltd to wholly acquire the firm for USD62.0 billion.
Shire's current Baa3 rating is representative of its revenue base of USD15 billion and strong market position in haemophilia, immunology, and neuroscience, off set by competitive pressures and management's willingness to increase financial leverage for acquisitions, Moody's said.
The review of Shire will be tied to the rating review for Takeda, which has been downgraded to A2 from A1. The Takeda review will involve the assessment of the execution challenges facing the Japanese company in integrating Shire.
"Even without the Shire acquisition, we do not expect Takeda to maintain a financial profile consistent with its previous rating of A1," said Moody's analyst Yukiko Asanuma.
"At the same time, the rating is on review for further downgrade because, if Takeda acquires Shire as currently contemplated, its gross debt/earnings before interest, tax, depreciation and amortisation will almost double to about six times," adds Asanuma.
Shares in Shire closed down 1.4% at 3,978.00 pence on Wednesday.
