Shire PLC (LON:SHP) (NASDAQ:SHPG) has rejected a £42.4bn takeover offer from Japanese drugmaker Takeda Pharmaceutical Company Ltd. and now Allergan (NYSE:AGN) is reportedly considering a bid for the company.
Takeda on Thursday confirmed earlier reports that it had made a cash and stock offer of £46.50 a share for Shire.
The Japanese firm now faces a bidding war for Shire as Botox maker Allergan is said to be in talks to buy the company, Reuters reported, citing sources. Reuters said it was not clear whether Allergan had put forward an offer and the company did not immediately respond to requests for comment.
And the mystery bidder competing against Takeda for Shire is.... Allergan, sources say. Story coming on @reuters $AGN
— Greg Roumeliotis (@GregRoumeliotis) 19 April 2018
In reaction, Shire's shares jumped 8% to £40.70 each in London afternoon trading.
Takeda's deal represents a 51% premium to Shire's share price on March 27, the day before Takeda said it was considering a bid for the London-listed company.
Under the proposed deal, Shire shareholders would own 51% of the enlarged the group.
Shire said in a statement that the proposal "significantly undervalues" the business and its growth prospects.
The company revealed that it received three conditional proposals from Takeda on March 29, April 11 and April 13. The first valued Shire at up to £44.00 per share, the second was £45.60 and the third was £46.50.
Shire to consider improved offers
After rejecting the third proposal, Shire said it met with Takeda's advisers to discuss whether a "further, more attractive, proposal may be forthcoming".
"The board and management of Shire remain committed to enhancing shareholder value and are focused on fully evaluating internal and external opportunities to maximise value for shareholders, including any further proposals from Takeda," it said.
READ: Japan’s Takeda considers takeover offer for Shire
Takeda says talks with Shire ongoing
Takeda said in a statement that discussions regarding a potential offer are ongoing.
“Takeda and its board reiterate that it will remain disciplined with respect to the terms of any such offer," it said.
Takeda had until April 25 to make a formal offer for Shire or walk away. The Japanese firm has been looking to grow overseas amid patent expirations and a shrinking domestic population.
An acquisition of Shire would extend Takeda's global reach and see it secure new assets in gastrointestinal diseases and nervous-system ailments as well as key treatments in the late stages of testing.