Shire accepts US$64bn proposal from Takeda

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The Board of Shire says it is now willing to recommend a US$64 billion deal with Takeda.

Shire's announcement was in response to Takeda's fifth proposal for the company. The proposal values Shire at an equivalent of £49 per share, comprised of £27.26 in new Takeda shares, and £21.75 in cash.

The fourth proposal was based on a valuation of £47 per share. The first proposal was based on a valuation of £44 per share, which valued the company at approximately £41 billion, or US$57 billion.

In a statement, the company said Shire shareholders would own approximately 50 percent of the combined entity.

"The Board has indicated to Takeda that it would be willing to recommend the Revised Proposal to Shire shareholders subject to satisfactory resolution of the other terms of the possible offer, including completion of reciprocal due diligence by Shire on Takeda," it said.

Due diligence will cover agreement "of certain other terms" of the revised proposal, a recommendation from the Board of Shire and its approval.

The regulatory deadline for concluding the deal has been extended to 8 May.

"Takeda and its Board have remained disciplined with respect to the terms of the Revised Proposal and Takeda intends to maintain its well-established dividend policy and investment grade credit rating," said Takeda in a statement.

A confirmed deal would create a new global giant. It would bring together Shire's rare disease and blood products portfolio, significantly enlarged by its US$32 billion acquisition of Baxalta in 2016, and Takeda's growing oncology and gastroenterology portfolios.

Takeda and Shire had combined sales of almost US$30 billion in 2017, which would comfortably put the new entity inside the top ten pharmaceutical companies by revenue. Shire is a member of AusBiotech.