06.06.18

Group of Takeda Shareholders Call Proposed Shire Purchase “Height of Madness”

Source: FirstWord

A group of Takeda shareholders have criticized the company’s deal to buy Shire as “the height of madness,” raising concerns over the level of debt that will need to be taken on to fund the purchase, the Financial Times reported. The group hold just over 1 percent of Takeda’s stock, but includes several founding family members of the drugmaker.

According to the Financial Times, small individual investors, which account for around a quarter of Takeda’s shareholders, may be swayed by decisions from founding family members. People with knowledge of the situation suggested that founding family members own around 10 percent of Takeda, although they reportedly remain divided in their view of the Shire deal.

Under the agreement reached last month, Takeda plans to acquire Shire for approximately 46 billion pounds ($61.7 billion), with the transaction including 49.01 pounds ($65.75) per share, comprised of $30.33 per share in cash and 0.839 shares of the Japanese drugmaker. However, Takeda’s shares have fallen more than 20 percent since the company revealed its interest in buying Shire, mainly due to concerns over the size of the deal.

“We are not opposed to acquisitions. We fully realise that Takeda needs to strengthen its pipeline,” said a senior member of the investor group, which consists of 130 shareholders and retired company employees. “But we want [CEO Christophe] Weber to protect Takeda’s 230-year tradition and manage the company in a sustainable and stable manner,” the person added.

The group has also questioned the prospects of Shire’s haemophilia business, which accounts for about 26 percent of its annual revenue, as it faces increased competition from drugs including Roche’s Hemlibra (emicizumab). The group has instead asked Weber to focus on buying small to mid-sized pharmaceutical companies, but, Shigeru Mishima, a former UBS analyst advising them, noted that by taking on a purchase the size of Shire, “the company will not be able to do any more deals.”

Commenting on the news, Credit Suisse analyst Fumiyoshi Sakai questioned if the group could gain the support of retail investors to block the Shire deal. However, he noted that “the institutional investors in Japan don’t seem to have made up their minds yet on how they view this Shire deal.”

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