Member Info for Redtom

Yes, but only for a portion. The cash element is purely dictated by GBP:USD. The share element by Takeda SP and the Yen:GBP movements. So if general market movements impact Takeda, then we are likely to suffer some movements subject to movements in the Yen. At few minutes ago the offer was worth 4901p again but the offer gained 185p from exchange rates and lost 185p from Takeda SP falls. This highlights the volatility! Good luck mate.

Because it is no longer (or only insignificantly) driven by other share movements or indices movements other than fx rates, Takeda SP and general sentiment as to whether the deal will go ahead. Everything else is irrelevant. Takeda was down overnight. If the markets have a tumble, SHP might be a protector unless Takeda tumbles too.

Value of the offer a few minutes ago, based on live fx rates, was 4883p with 2267p in cash and 2616p in shares. With current SP of 4217p, the SP would need to rise 15.78% to match. From the original offer value of 4901p, we have lost 184p in value due to fall in value of Takeda shares but gained 165p because of fx gains on the cash and share elements.

Value of offer a few minutes ago was 4876p with 2248p in cash and 2628p in shares. With current SP of 4207p, the SP would need to rise 15.89% to match. From the original offer value of 4901p, we have lost 130p in value due to fall in Takeda shares but gained 105p because of fx gains.

I don't think Takeda will be buying in the open market. The buys will come from market punters/hedge funds/aribtragers etc. If you firmly believe that the deal will happen then there is 15% to be made within 9 months. Even if the deal value stays around �49, I doubt it will get anywhere near �45 for months. Even close to completion I suspect that the discount will remain high because of the currency risks Takeda paper risks. The only way to get full value will be to get the Takeda shares (via US ADRs) in my opinion. But �45 will be available once the votes have happened.

Value of offer today is 4903p being 2242p in cash and 2661p in Takeda shares. Current SP is 86.6% of the offer so the gap is closing.

Based on current variables, the offer is worth 4924p being 2245p in cash and 2679p in Takeda paper.

Still many risks (shareholder approval, currency risks, Takeda SP risk, regulatory etc) and it wont complete for another 9 months. Having said that, a 20% gap is rather large. I would have expected �42 ish maybe. But it may be months before you see �45, even into 2019. But be patient as that is a fab return.

I am surprised that the SP is not a little higher. I would have thought that the professional arbitrage brigade would be all over this given the gap.

Wow, I got my timing wrong by about 10 mins. Whoosh! Rumours abound now.

The stagnant price (24% below offer) gives me a bad feeling for tomorrow. Having a 24% difference is highly unusual unless there is a reasonable high chance of the deal not happening. Something just feels wrong. I'm amazed at how steady (and boring) the SP has been today and yesterday. I would have thought that there would be a multitude of rumours (some based on leaks, other on hot air) sending the SP violently in both directions. Very strange. I guess this is the calm before the storm!

I struggle to reconcile the BoDs message (below) and the 4th offer that is a tiny bit above the 3rd offer. Admittedly there is a bit more cash but only 50p in overall consideration. Yet the 3rd offer 'significantly undervalued' Shire according to the announcement. How can they accept the 4th given their comment about the 3rd? "The Board met again and thoroughly considered the Third Proposal with its advisers and unanimously rejected it, concluding that it continues to significantly undervalue the Company and Shire�s growth prospects and pipeline. Following the Board meeting on 14 April 2018 which rejected the Third Proposal, at the Board�s request Shire�s advisers entered into a dialogue with Takeda�s advisers to discuss whether a further, more attractive, proposal may be forthcoming and to understand the basis on which such a proposal would be made. 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."

Given how leaky this bid/deal has been, I am amazed that the outcome has been kept secret today. This is how it should be but I am just surprised. The market obviously can not read it either as we are priced pretty much in the middle of a deal/no deal situation, ie it is looking 50:50. May go to the wire (ie Wednesday). There is going to be some mega volatility in the coming days and weeks. Only for the brave (or stupid).

There will be a lot of volatility and the new huge debt burden will a worry to some. But the level of debt undertaken will be priced in way before our shares are listed and tradeable. I would be more worried that Takeda are not able to manage the enlarged group and that its results in the future do not match expectation. If this happens then the risk associated with the known level of debt increases. I could be wrong but the immediate SP of Takeda after announcing the offer will be your best indicator of the likely price. The big boys are unlikely to sell out and us small investors have absolutely no influence over the SP. The PIs will either sell before completion (ie before share issue) or will sell their Takeda holdings soon after conversion. Either way there should not be a drastic fall. If Takeda SP falls hugely on the announcement of a bid, then the deal is likely to fail anyhow.

I agree with Romeike. The mere suggestion of a 50% fall is ridiculous. This would be a dual listing and will be priced to match the value on the Japanese markets. Any potential fall will happen way before the actual listing. There will probably be a fall as soon as a deal in announced and this will drop the value of the �26 portion. I would not worry about the paper side too much. Or if you are that worried, sell as soon as the deal is announced. You will still get �42-44 in cash.

I agree with you to some extent. But if no offer comes there will be a severe reaction in the short term anyhow. The herd mentality (not necessarily rational) will prevail and market makers will be happy to oblige. So I think it will have a horrible fall to start with and I mean a drop of say 500p. But there is an increasing recognition, as you say, of the value of the various bits of Shire and it will get a re-rating and come to be loved again. The BoD need to show strong and clear leadership and guidance as that this the root of the current weakness. Without a deal, it will be a long time before it hits �47/48 again so I strongly urge the BoD to agree the current offer.

Rumours are that there was a Board Meeting over the weekend. But there are no rumours, as yet, as to the outcome of that meeting.

If Shire do accept, I wonder whether they will issue a statement or simply confirm this privately to Takeda so that they can issue a formal bid. As publicly not rejecting the latest appoach is not the same as Takeda actually issuing a formal bid.

Good question and not one I can answer. But lack of leadership and direction, poor communication, all contribute to a poor SP compared to some peers. Maybe the fall will not be as steep as a re-rating may be due off the back of the approach but FO has a lot to answer for. He could organise a **** up in a brewery.

But a rejected bid is the same as no bid as Takeda will not go hostile. Hence the markets are still very uncertain as to which way this will go. A rejected bid (remember they rejected the previous 3 approaches as FO stated these hugely undervalued the company) would send the SP down to low 30s. An acceptance from Shire leading to a bid of circa �47 will boost the SP up to �43-44 imho. So a bit 50:50 at the mo. FO probably wants to reject but major shareholders will be putting a lot of pressure on him to get a deal done. Nobody wants an SP dropping back to low 30s. FO will be booted out if that happens. Flip a coin, heads is �44, tails is �33. Good luck.