Member Info for Redtom

notgreedy, Debt in Japan costs about 0.7%. In the west, it is more like 3%. Hence my comment but only relevant to Takeda, not Shire.

Scfc, This is rather odd and I can't quite get my head around it. Takeda have obviously been looking at Shire for a couple of months. They publicly say they are last week. Surely they (and their many advisors) themselves (who know their finances and debt availability/pricing) must believe that a credible bid is possible? Otherwise they would not have got this far. I totally agree with you in that ,under Japanese culture, any bid would be a serious bid. Equally, under that type of culture, I don't think they would have said what they said without believing that are in a position to make a serious and credible bid. Markets obviously as confused as we are. But a bid of �38 would not be unreasonable given an SP of �30 pre-announcement. Whether the amount of debt taken on (but at ridiculously low rates) or the amount of Takeda Paper being offered is deemed credible, only the big boys can determine that. At the end of the day we are tiny pawns and it is the big shareholders who call the shots. Complete uncertainty at present but some clarity will appear over the next 22 days! Or even further confusion perhaps ;-)

"I heard Takeda is looking to acquire Shire" I found this quote on another chat board, dated Feb 12th. Interesting!

Scfc, I suspect that you are right. If no real expectation of Takeda succeeding, there is no rush for others to join the fray. We kind of need Takeda to scrape together a bid that is just about credible to force the others to act.

W-i-m, I agree with your sentiment but I don't think it will happen like that. Once the Takeda bid fails (for whatever reason), the SP will fall sharply. So let's imagine they bid �38 (combo of cash & Japanese paper). If it falls over (eg not willing to take large slug of Paper), the SP will fall well below �38. I suspect that it would not even reach �38 in the first instance (due to lack of credibility) and would fall back 10-15% immediately. imho only. So back to �33 ish?

I don't think anyone thinks that the Takeda deal will happen. Whether they will actually make an offer is the burning question. As long as the Takeda SP does not fall much more, I think they may make an offer around �38 (possibly towards �40). This will be rejected for many reasons (price, Paper etc) but hopefully will bring out the real suitors (ie Pfixer.Abbvie etc) who may be willing (and able) to pay a fuller price. I suspect that this fuller price will be no more that �45. I think anyone expecting �50+ is rather unrealistic, irrespective of where the SP has been at over the last couple of years.

Not looking so rosy this morning

Book-Worm, I disagree with on a number of points. Under the City Takeover Code, Shire had to issue a notification given that Takeda were forced to too. Therefore Shire had to confirm whether there had been a direct approach or not. All they did was confirm this. Takeda were forced to notify the City (probably before they wanted to) because of leaked rumours. I said yesterday that I bet Takeda will not end up buying it. But being a Japanese company I fully expect them to make an offer. Not to do so would be embarrassing under Japanese business culture so I think an offer will be made. But, because of their size, I suspect that the offer will be relatively low (eg around �40) and will include Paper. This offer is unlikely to be attractive to Shire not to its shareholders and I suspect it will be rejected. At this point Takeda might raise their offer or they may well walk. In this case the SP would fall but not to sub 30. In the meantime, I suspect that other suitors will come forward and may decide to counter offer to make a fresh offer further down the line. But now Shire is really in play, potential suitors will be on their toes. They may not have wanted to buy it just yet but equally they will not want a competitor to buy it on the cheap. Either way I do not agree with your conclusion that it will fall way below the level when Takeda announced. My personal view is that Takeda will bid but will ultimately fail (around �40). I think that Pfizer or Abbvie or a European giant will join the fray and will end up getting it for around �45. At this level (and with combo of cash and more acceptable Paper), the BoD cannot reject it.

I think the problem lies with Takeda's inability to fund this deal. Their SP is down 9% in last 2 days which dents their ability to issue paper but also tells them that their shareholders are not so keen. Takeda is smaller than Shire so funding a $55bn deal is probably beyond them. Thus share price is only at �34.5. But this could accelerate other potential buyers. I would put my house on Takeda not buying Shire but I do believe that another suitor will appear.

The market is doing its job. After a sustained period of poor performance, drugmaker Shire Plc has attracted the attention of Takeda Pharmaceutical Co. A full-blown takeover would be highly ambitious -- perhaps too ambitious -- for the Japanese suitor. But Shire�s defenses are weak and the other big pharmaceutical groups are on the prowl. Shire stock has fallen 45 percent in the last 15 months, mostly the result of the poorly received acquisition of Baxalta Inc. in June 2016. Management credibility is weak. Even after gaining on Takeda�s interest, the shares, at about 36 pounds, trade at a big discount to peers on both earnings and Ebitda multiples. UBS analysts have a price target of 40.95 pounds on the stock. Takeda says it is considering an approach. There are no talks let alone a concrete offer. The stated logic for a deal would be to strengthen the Japanese group�s oncology, gastroenterology and neuroscience businesses and boost its presence in the U.S. Takeda also covets Shire�s rare disease franchise. It�s hard to see big opportunities to cut costs here. Shire�s is a peculiar therapeutic mix and, as UBS notes, a bidder could jeopardize Shire�s favorable tax rate too. The hemophilia franchise also faces stiff competition. In reality, the attraction is that Shire is cheap and vulnerable -- something which other bidders will see. The challenge for Takeda is structuring a deal. The suitor has a market value of 4.4 trillion yen ($42 billion) compared with Shire�s 28 billion pounds ($40 billion) before takeover interest emerged. Use a three-month volume-weighted average share price, and the valuation is a little higher. Those relative sizes mean Takeda would need to structure an offer largely in its own stock. If Shire shareholders weren�t keen on, or able, to hold shares that trade in Japan, Takeda might have to provide an additional U.K. listing -- as Dana Inc., of the U.S. is proposing in its bid for GKN Plc�s automotive business. It�s all quite fiddly. Unfortunately for Takeda, it may suffer a first-mover disadvantage. Who else might see an opportunity? Novartis AG has a strong balance sheet and will soon receive $13 billion from the sale of its share in a consumer health joint venture to partner GlaxoSmithKline Plc. That said, Novartis has said its M&A strategy is about bolt-ons and this would be way too big for that. Paris-based Sanofi is acquisitive in the hemophilia area, although its leverage is creeping up with recent deals and would probably also have to resort to funding its offer in stock too. Abbvie Inc. is another possibility -- it�s just had a major setback with one of its main pipeline drugs, and tried to buy Shire in 2014. Put a 33 percent takeover premium on Shire�s undisturbed price, add net debt, and a full-blown takeover would cost about $73 billion. But with Shire expected to make about $7.6 billion i

I think you forgot to take your medication.....

A potential acquisition of London-listed Shire by Takeda Pharmaceutical was greeted with investor scepticism about it merits on Thursday, with shares in the Japanese drug maker tumbling 7 percent. Takeda, currently worth some $39 billion, is smaller than Shire, a rare disease specialist which saw its stock jump 16 percent to be valued at some $45 billion after the Japanese firm said it was in a "preliminary and exploratory stage" of considering a bid. That similarity in size had raised the question whether the damage to Takeda's finances would be worth the boost to its portfolio and pipeline. "The impression left by the news is that the acquisition would be an overreach," said Mizuho Securities analyst Hiroshi Tanaka in a note to clients. Any deal is expected to involve some form of equity, whether that be a share swap or a share issue, analysts also said, noting a share issue could be highly dilutive for Takeda shareholders. Takeda said an acquisition of Shire, which also sells treatments for attention deficit disorder, could create a global biopharmaceutical leader, boost its position in the United States and in the fields of oncology, gastrointestinal diseases and neuroscience. But some analysts also doubted whether Shire's treatments for haemophilia and other rare diseases would benefit Takeda and thought that any deal should be more targeted. "We think neuroscience assets alone, which Shire said are under strategic review, would be a realistic target, but we find it hard to imagine Takeda acquiring all of Shire," said UBS analyst Atsushi Seki. "We think the possibility of it making a proposal is very low, but its share price will likely be under pressure from concern over potential dilution."

IMO I think a bid will only be in the low 40s and not the 50s that some have suggested. Debt, competitive issues, over-payment for Baxalta, division split, will all be factors. If I was a betting person I would guess at 4400p. I would be very happy with that price. Difficult to see much higher than that. Thoughts?

ZURICH (Reuters) - Roche shares dropped on Wednesday after U.S.-based National Hemophilia Foundation said Roche�s Genentech unit informed it of five deaths of patients treated with its drug Hemlibra. The shares slipped 1.6 percent at 0720 GMT. The foundation quoted Genentech as saying it has limited information about the circumstances surrounding the deaths but that Genentech reported they have �all been deemed unrelated to Hemlibra by the investigator or treating physician�.

Can you expend on this as I could not find anything about a legal challenge being dismissed?

Mulder, I may have to eat my words if the SP movement is anything to go by. Two days of 100p movements (particularly on a down day like today) is unusual. Unless there is something else driving today's movements, this could be speculative M&A activity.

This is a rarity indeed!

This article offers nothing. He merely says that this company could be on the acquisition radar of other companies. Something that we all know anyway.

Mulder, I disagree re bid but completely agree about Ornskov. He is hopeless and in way over his head. If any bid had been made, it would have got out. The fact that the new CFO is buying shares is further proof that there is no ongoing discussions. Potential buyers (if there are any) are playing a wait and see game. If I was thinking of buying Shire, I would want to see out 2018 first to see further proof that the Baxalta purchase has value, that debt repayment continues at same rate (ie profits are reflected in cash and not by accounting manipulation) and the split of the 2 divisions. Given current market conditions, any buyer has plenty of time and may get it cheaper later. Personally I don't think any buyer exists as the risks outweigh the gains. IMO etc

(ShareCast News) - Analysts at Morgan Stanley took a fresh look at rare diseases specialist Shire on Monday, revisiting their bear case as the investment bank reiterated its 'overweight' rating on the group. Morgan Stanley, which snipped its target price on the to 4,700p from its previously issued 5,700p mark, reassessed is bull-bear base values by around 20%, citing setbacks for Lialda generics for the ulcerative colitis drug, challenges for Xiidra's dry-eye market access, threats to the haematology unit, and low visibility on a potential separation of neurosciences, driving a 12% cut to the 2018 consensus EPS forecast. "We also consider different valuation methodologies to gauge a support level for the stock. Our stress test suggests that �29/sh appears to be a floor, slightly above our �27 bear case derived from a less granular approach," Vincent Meunier and his team of analysts said. With the shares changing hands for not much more than 3,000p, analysts' 4,700p price offered a 50% upside and reflected a lower long-term discounted cash flow assumption, even if Shire could still suffer from increased competition in its rare diseases wing, which had so far not been perceived as a risk, as well as the potential of failing to fully integrate Baxalta and extract planned cost synergies from the former Baxter International business. "Shire has undoubtedly suffered from negative newsflow and the overhang of competition. We struggle to justify significant absolute downside from here; the stock remains undervalued and underappreciated for its strong delivery," the Monday note read.