Takeda is in talks with Shire after its $61 billion bid was rejected

Yuriko Nakao | Bloomberg | Getty Images

hristophe Weber, president and chief executive officer of Takeda Pharmaceutical

Japan’s Takeda Pharmaceutical is in negotiations with Shire after making a third takeover bid worth around $61 billion that was rejected by the London-listed rare diseases drugmaker.

Reuters first reported that Takeda had made a cash-and-stock takeover offer of 46.50 pounds a share, prompting Takeda to issue a statement confirming the move. The latest offer was made on April 12.

“Takeda was subsequently notified that the board of Shire had rejected its proposal. Discussions between the parties regarding a potential offer are ongoing,” the company said on Thursday.

Shire confirmed that it had received three conditional proposals from Takeda.

The announcement comes ahead of an April 25 deadline for Japan’s biggest drugmaker to make a firm offer or walk away from the FTSE 100 company, after it said last month it was considering a bid.

Shares in Shire were up 3 percent at 38.64 pounds in London.

Buying Shire would be transformational for Takeda but would be a big financial stretch, since the company is worth in excess of $10 billion more than the Japanese group. Shire also had debt of around $19 billion as of the end of 2017.

Takeda’s rejected bid comprised 17.75 pounds in cash, which would be paid in U.S. dollars, and 28.75 pounds worth of new Takeda shares. That would value Shire at approximately 43 billion pounds, or $61 billion, Thomson Reuters data showed.

A successful acquisition of Shire would be the largest ever overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers. It would significantly expand its presence in the all-important U.S. market.

Shire is best known for selling treatments for rare diseases and attention deficit disorder. Earlier this week it struck a deal to sell unlisted French group Servier its cancer drugs for $2.4 billion.

The drugs industry has seen a surge in deal-making this year as large players look for promising assets to improve their pipelines, but a Takeda-Shire transaction would be by far the biggest yet.