Takeda Pharmaceutical Co. is nearing a preliminary agreement to acquire Shire Plc after the Japanese drugmaker sweetened its roughly $60 billion bid for the biotechnology company, according to people with knowledge of the matter.
The two companies have been working on a tentative agreement on price and might announce a preliminary accord as early as Tuesday, the people said, declining to be identified as the discussions are confidential. Under UK takeover rules, Takeda must announce a firm offer or abandon its pursuit by Wednesday. The companies may seek an extension from authorities to finalise talks, the people said.
Discussions have revolved around an improved offer, including a possible increase in the cash component, the people said. The exact terms of the offer couldn’t be immediately learned. Talks may still be delayed or fall apart, they said. Representatives for Takeda and Shire declined to comment.
Shire shares surged as much as 6.2 percent in London, valuing the company at about 37 billion pounds ($52 billion). Takeda has declined about 24 percent this year, valuing the firm at about $35 billion.
Acquiring Shire would vault Takeda, which has few late-stage experimental drugs in its own pipeline, into the ranks of the world’s top pharmaceutical companies. The Japanese company last week raised its offer to 47 pounds a share and lifted the cash portion of the bid after three prior proposals were rejected.
Friday’s proposal included 21 pounds a share in cash and 26 pounds apiece in new stock for Shire, whose market value has soared since the takeover interest was disclosed last month. Takeda has been ramping up its takeover ambitions under CEO Christophe Weber, seeking growth overseas amid patent expirations and a shrinking domestic population.