Shire Share Discussion Threads

[polaris] 09/5/2018 22:24

Back to 4040 equivalent on US close - quite some positive movement after the UK close at 1630 on the intraday stateside. Next up is the Takeda price movement in Japan and then back to SHP on the LSE. Rinse and repeat.

One interesting "mixer" for tomorrow is the BoE rate decision. The GBP has taken a hit already over the last 2 weeks. Is a non rate hike now priced in or will we see GBP hammered again? That has a large knock-on effect here due to the dual currency effects for GBP:USD and GBP:YEN. Of course, if BoE raise rates anyway then it will all go the other way...but that seems unlikely with recent economic data.

[mbmiah] 09/5/2018 21:29

Moody's puts Shire under upgrade review......hmmm.

[nigelpm] 09/5/2018 21:06

Up well over a 1% in the US following the market up - watch Takeda overnight.

[philanderer] 09/5/2018 17:55

hjs, that would be the ideal scenario, but bearing in mind there's hefty break clauses on both sides though.

[pete160] 09/5/2018 17:54

If Takeda can borrow at 0.34% I suspect that the cash generation of SHP will service an awful lot of the borrowing - even before they start to split things off and sell the bits they don't want (or someone bids handsomely for) strip out central costs, consolidate R&D, etc, etc.

No-one seems to have mentioned it yet, but perhaps the biggest threat to this deal completing is if there is a market sell off in the order of 25-30%. Then everyone might think again about the price tag.

Surely if people want to reduce their risk the best thing to do is to sell the physical stock and take an option out instead ? If I were cleverer I might know how to do that to make it work.

[hjs] 09/5/2018 17:43

IMO, the deal will go through but It would not surprise me for another lower cash bid to appear say at £45 now that Takeda's bid is on the table with cash and shares.

[philanderer] 09/5/2018 17:28

SHP stateside back up over 4000p at the moment.

[dealy] 09/5/2018 17:11

The share price of both companies is saying approvals will not be achieved

[montyhedge] 09/5/2018 17:04

Do they or can the big funds hold Japanese shares? Shareprice perhaps telling us something.75% needed quite a lot.

[cockneytrader] 09/5/2018 16:52

This deal will eventually go through. Why would Shire shareholders vote against - this would prove counterproductive for share price.

[scfc1] 09/5/2018 16:47

This in essence is why I was very sceptical that it would actually happen (at least a formal offer). I admit I was wrong.

However, my logic was the fact that Takeda were adamant that they would aim to maintain their credit rating and keep their 3%+ dividend yield, etc. This just isn’t compatible imo with the massive debt needed to make this happen and the resultant financial effects it has...I think they even referred to having a max debt to EBITDA of of c3. As such I took these as almost red lines when clearly they - driven by their very ambitious CEO I expect - have seemingly ignored these in their pursuit of Shire which they were clearly not going to stop on...I’m still amused (or is it bemused) by their recent statement yet again that they have remained disciplined in their takeover approach. Yep! Quite how, I ask!?!

Don’t get me wrong before I get shouted down as a non-shareholder and/or shorter - not true - as I do think it’s a pretty good deal for Shire shareholders (especially in light of the dismal share price performance for the previous c12 months), but that’s quite different if you are on the other side of the transaction and hold a large number of Takeda shares (and no, I thankfully don’t hold any Takeda shares or ADRs!). ATB, Scfc1

[montyhedge] 09/5/2018 16:09

Markets probably thinks big boys won't agree. Need 75%

[philanderer] 09/5/2018 15:42

Takeda chief says Shire deal a step toward becoming global leader

[philanderer] 09/5/2018 15:39

Takeda Pharmaceutical Co.’s credit rating was downgraded by Moody’s Investors Service one day after the Japanese drugmaker said it had reached a deal to buy larger rival Shire Plc for about $62 billion.

Takeda’s debt rating was cut to A2 from A1 on Wednesday, bringing it down one notch to the sixth-highest investment-grade level. The new rating is under review for further downgrades, Moody’s said in a statement, calling the scale of the Shire transaction “extraordinary.”

[romeike] 09/5/2018 15:31

18 months is overly long, it ought to take no longer than 9 months to implement the acquisition.

[nigelpm] 09/5/2018 14:54

@Fan - certainly this one is going to go the right way ;-)

[cockneytrader] 09/5/2018 14:14

To Pete, they have no money to buy shares in the market place!

[fangorn2] 09/5/2018 14:11

@Nigelpm,

Still "Long" and strong here myself..be afraid :)

[nigelpm] 09/5/2018 12:48

So I'm not sure it will be the day traders sweetheart of recent years.

My favourite type. Minimal downside, lots of potential upside and getting swung around for fun.

[pete160] 09/5/2018 12:28

Surely now that the bid is formal and agreed – albeit subject to contract, and assuming that Takeda have the lending in place - then they can start buying SHP shares in the market place. They are after all buying at a hefty discount to their bid so saving money each time.

This will support the SHP price and offset those who might want to sell before the bid finalises (unless they are expecting a higher bid)

If they build a reasonable stake it also protects them against another bidder coming in.

At the same time SHP can continue with their buybacks.

[toffeeman] 09/5/2018 10:41

Well I figure that the return is likely to be about 20% from here to completion - so I bought some more.

[cockneytrader] 09/5/2018 10:32

Yes, Painfully boring, but a likely safe haven after share holder vote with some potential upside.

[redtom1] 09/5/2018 10:22

Nigel, I think it is going to become a pretty boring share over the next 9 months. As you imply, it will partly move with Takeda share price movements but also with USD & Yen movements v GBP. But these movements may be relatively small compared to the 20% discount. This discount may not erode until we are much closer to completion and probably mostly triggered by the 2 shareholder votes. Other than these, there is not a lot to move it in either direction. So I'm not sure it will be the day traders sweetheart of recent years.
Just my thoughts.

[nigelpm] 09/5/2018 10:03

I guess falls in Takeda won't be mirrored in Shire directly even allowing for the cash element. Should be a nice trading share for the time being.

[redtom1] 09/5/2018 09:51

I think both Shire and Takeda said this will complete in H1 2019 so, approx 9 months?