For Japanese pharma firm Takeda, its persistent pursuit of Shire (SHP) may have paid off after the rare diseases specialist says it will recommend an offer to its shareholders.
It is the fifth takeover offer from Takeda, which encompasses £27.26 in new shares and £21.75 in cash, implying a value of £49 per Shire share.
This represents a 24.5% premium to its closing price of £39.33 on Tuesday.
The offer values Shire at approximately £46bn and shareholders will be entitled to any dividend prior to the takeover, which will see shareholders own 50% of the enlarged Takeda.
Shares in Shire are flat at £39.41 as the takeover battle has dominated the headlines recently and investors are unsure whether the deal will go ahead.
The deadline to confirm the offer has been extended from today to 8 May.
WHY DOUBTS LINGER OVER DEAL
AJ Bell investment director Russ Mould says investors should consider whether Takeda has the financial resources to make any deal work as it is still digesting its $5bn purchase of Ariad.
Takeda has struggled with a 20% slump in its shares since the end of March and has plenty of debt on its balance sheet.
Shire itself has heavy borrowings following its $32bn acquisition of Baxalta in 2016 to take advantage of its leading position in a potential $14bn plasma products market.
Earlier this year, we explored the issues surrounding Shire over the last few years.
Mould argues Shire’s ability to drive the bid price up 11% and increase the cash portion by 35% since the first takeover offer might be concerning for Takeda’s shareholders.
