Takeda Pharmaceutical Co chief executive officer Christophe Weber is contemplating a deal for all of Shire PLC, telling a select audience that size is not an obstacle to a “mindful” acquisition.
Takeda confirmed the meeting took place on Thursday with analysts from UBS Group AG and Credit Suisse Group AG, among others.
Investors and journalists were not invited, and the Osaka, Japan-based company declined to confirm what was said, raising questions about the disclosure of potentially market-moving information in a closed-door setting.
A spokeswoman for Takeda said no new information was released about a possible takeover or merger.
However, Shire’s shares on Thursday gained as much as 6.1 percent, closing up 3 percent at £37.07 in London.
In Tokyo on Friday, Takeda had the largest drop on the Nikkei 225 Stock Average, falling 5 percent to the lowest level in more than a year.
Takeda is not considering purchasing only some businesses or assets, Credit Suisse analyst Fumiyoshi Sakai wrote.
Shire has not received any formal approach or offer, and Takeda has until April 25 to do so or walk away under UK takeover rules.
Weber sees a deal, which could be worth as much as US$50 billion, as an opportunity to accelerate Takeda’s growth, helping to transform Japan’s biggest drugmaker into a global leader, UBS Securities Japan Co analyst Atsushi Seki wrote.
“In a meeting in Tokyo, Takeda stressed their interest in Shire,” Sanford C. Bernstein & Co analysts wrote in a note. “We think the deal is likely because there is a willing buyer, willing sellers and room to meet both sides’ expectations.”
A survey showed Shire investors want £45 a share to close the deal, the Bernstein team said. Investors also want less than half the purchase price to be paid in the form of Takeda shares, the survey found.
Weber declined to comment on financing for a deal, UBS noted, but he reiterated his focus on maintaining Takeda’s dividend and investment grade.
Concern has grown over how the Asian drugmaker is to pay for a company whose US$47 billion market value tops Takeda’s US$37 billion.
Shire’s stock has soared more than 20 percent since Takeda’s announcement, widening the gap between the two companies’ valuations and creating a bigger financing hurdle for the Japanese company.
Credit Suisse analysts said in a separate note on Wednesday that Takeda should be able to absorb the higher interest costs and earnings per share dilution from a new share issue to raise funds for the purchase.
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