Member Info for Redtom

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.

Sadly, it is now off more than 100p. Somebody knows something for this sudden drop from positive territory.

SP down 90p today. Not looking good for a deal announcement is less than 2 weeks.

No, but did they expect a 14% drop in their SP? Did they know whether shareholders have the appetite for a $30bn rights issue? I suspect that they thought they could pull it off but this may be beyond them already based on relative SPs and shareholder reaction.

Previously I thought that there was about a 60:40 chance of Takeda making a bid. The slow creeping of the SP kind of tells me that it is looking more unlikely. Enough people know the reality such that leaks are inevitable and the SP responds accordingly. So if a bid of �39/40 was genuinely due with the next 2 weeks, the SP would not be drifting down as it is. Therefore I this it is now pretty unlikely that they will bid. At the end of the day, the maths does not work for a company as small as Takeda where they have strict financial criteria. I think they will announce that they are not pursuing the deal before the 25th deadline. All in my opinion only......

Scfc, In a way Takeda have a very easy 'get out', here. Ie that the SP of both has moved against them as has the fx rate. They can walk away and save face. The more I think about this the more I see it failing before it even starts. Think I might sell in the �36s as this will drop 10%/15%/20% when they do pull out.

Arbitrader75, I have to agree with you. Takeda are likely to offer �40 tops. That is $56bn. It would not surprise me if they offered slightly lower than �40.

The drifting of the SP implies to me that an offer from Takeda is becoming less likely. Not getting a good feeling. Hate to ask the question, but where does the SP drop to if Takeda say 'no thanks'? My guess �32-�33.

I guess not ;-(

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After Takeda revealed last week that it was eyeing a Shire buy, industry watchers expressed skepticism that the company could pull it off. Now, though, some analysts like the Japanese drugmaker�s chances. In a Thursday meeting, Takeda told analysts it was �willing to push its debt higher� in order to seal the deal, Bernstein�s Wimal Kapadia wrote to clients. And in light of that fact, he now sees a potential transaction as �more likely than not.� �We think the deal is likely because there is willing buyer, willing sellers and room to meet both sides� expectations,� he wrote. Shire shares have been struggling hard; new hemophilia competition from Roche has prevented them from bouncing back after a less-than-stellar Baxalta buy that left the company �too levered to do anything itself� as far as M&A goes. But while �Shire stand-alone struggles with negative earnings revisions and lack of catalysts in the near-term,� Takeda can afford to wait for the tide to turn. �The objective for Takeda is 2025 positioning,� Kapadia pointed out. Of course, just because Shire shareholders are open to a sale doesn�t mean there�s overlap between the price they want and what Takeda�s willing to lay down, he noted. According to a Bernstein survey, investors are hoping for �42/$175 per share to kick off negotiations and �45/$190 to ink an agreement�as well as less than 50% in Takeda shares. Other analysts had previously voiced doubts that Takeda could afford a Shire buy after its interest announcement sank shares but sent Shire's soaring. But the way Kapadia sees things, Takeda can probably get it done thanks to a willingness to go to 5x leverage and the opportunity to issue shares locally, which would reduce the shares issued to Shire investors. �We believe the local market will be willing to absorb more Takeda stock given the positive local headlines and limited share movement down since the deal has been announced,� Kapadia wrote. Meanwhile, the pharma intends to drum up some extra cash with a sale of its Brazil-based pharma unit, Multilab Ind�stria e Com�rcio de Produtos Farmac�uticos, Reuters reported. Takeda plans to offload the business to Novamed Fabrica��o de Produtos Farmac�uticos in June at an undisclosed price.

Takeda SP fell 5% this morning on anticipation of an imminent bid for Shire plc.

Majore Shire shareholders stated that they would seriously consider starting bids for negotiation around �42 and would accept �45 to close.

Scfc, I've been thinking about this one too. I can only assume that they would intent to do a massive equity raise (ie rights issue to raise cash specifically for purchase). This would help maintain the A1 rating and net debt ratio. Maintaining the dividend policy would be more challenging as a shed load more shares in place. But it is possible. Primarily this will come down to the big shareholders in Takeda. If they have faith in this deal they will put up the cash. If they are resistant, then the deal is difficult. Alternatively they cut out the middle man and structure the deal as mostly equity swap. Creates the same net position, just different shareholders. I don't know how much debt they could take on and still maintain both their A1 status and 3 times EBITDA but this would only pay a modest proportion of a $55bn deal. I'm still hoping that they make a bid but the maths looks difficult. However, surely, they have already worked all of this out otherwise their M&A dept needs shooting! Based on my previous life working on M&A deals, they will have extensive models covering every variable and scenario.

Just saying...... ;-)

I heard a rumour that there could be another suitor having a look. No evidence but hope it might be true. Alternatively, its more likely that Takeda will make a bid. Hence the rise again today. My �37.60 guess below is looking a bit undercooked now.

People, 1) Based on everything we have read (or read into), will Takeda make a bid in the next 21 days? Yes or No? 2) If Yes, what is your price and how split between cash & equity? My go first. 1) on balance Yes but only just. Probably 60:40 but enough for me to say Yes. 2) I'm going for total bid price of �37.60 with 40% cash and 60% equity.

Scfc, Umm, yes, you may well be right. I hope not but that could be the reaction of a bid becoming more unlikely. I hope it is more a reaction to a previous over-reaction where no facts are actually known. Tom

Nice to see the Takeda SP rise today. Slight over-reaction last week given the complete lack of detail. Takeda will need to raise funds via a combo of debt & equity so any rise in their SP is good news. But we will get a truer reflection of Takeda shareholders reaction once the terms are announced (if they make a bid).