Shire Share Discussion Threads

[philanderer] 11/5/2018 23:18

Slightly lower 'after hours' but could bode well for next week,especially with Takeda boss in town :-)


Good weekend everyone.

[justiceforthemany] 11/5/2018 22:10

Equates to £40.98 with USD 1.354:£

[ny boy] 11/5/2018 21:03

Strong close stateside, around $167, no idea what that equates to but for sure we will open a fair bit higher on Monday, best to stay fully invested with patience.

[justiceforthemany] 11/5/2018 19:25

Doing well now in US. $166

[swedeee] 11/5/2018 15:56

little writeup on fiercepharma. didn't know this had been in the making for 2 years

hxxps://www.fiercepharma.com/pharma/shire-and-takeda-officially-shake-hands-62-billion-deal?mkt_tok=eyJpIjoiTWpnMlpXUTRNVGxoWm1WayIsInQiOiI5TmVhVTdQeThwVklqVnJzQmtyRHZRZWVNZTIxaDhWQTFpXC9MXC9jRUIrZ1wvRXEycDNPUkc2WGNiS281SFZhTURTZjVacFFZYjV5WFY0bzJmYloxN3VLRlZWOU93dmphNXZhNlNWK3dxanFOaEtnNkZtQjAzUnNTd2E0MzVvMVFIUCJ9&;mrkid=67999416

[montyhedge] 11/5/2018 15:46

redtom
Market thinks differently than you, all you need is one fund to say, not accepting, I think the rest would follow. Shire a good growing company.
Simply Wall Street, analyst, future cash flow value £55, I don't think Shire needs this bid.
But hey I don't know what the big boys are thinking.

[redtom1] 11/5/2018 15:21

Discount is 20% for many reasons (time to complete, currency risks, Takeda no vote, regulatory issues etc) but very little of this discount is due to the risk of a no vote from Shire shareholders.
The current discount indicates a certain risk of failure but that failure is much more likely to come from Takeda shareholders not Shire.
Using your numbers, why accept £35 when you can have £48?
And if your argument is that they are getting Shire too cheap, keep hold of the Takeda shares as they will include these undervalued shire assets.
No sensible fund manager in UK/US/Europe will risk a £5 hit rather than a £8 gain.
Absolute slam dunk. As slam dunkish as a slam dunk can be.

Takeda on the other hand are going to take some persuading. They are 20% down because of this bid. If the bid fell over, which way would their invest go in short term?

[cockneytrader] 11/5/2018 14:40

Managers think long term - don't forget about performance fees ;-)

[montyhedge] 11/5/2018 13:50

Share price telling its not a slam dunk, not me, Mr Market, why do you think Shire at a 20 per cent discount. Fund managers don't have to take the offer, they think long term, Shire growing nicely. Would not fall back to 3000p perhaps 3500p.

[cockneytrader] 11/5/2018 13:37

Monty. Why would shire holders vote no? The share price would bomb, and in a worse case fall closer to the cash only value than the cash + Takeda share value. Don't be silly.

[montyhedge] 11/5/2018 13:11

redtom
Seems Mr Market agrees with me, going by the share price, don't be so sure this is slam dunk, more 60/40 is my view.

[redtom1] 11/5/2018 12:47

Meant to add at the bottom, IMHO

[redtom1] 11/5/2018 12:44

Monty, what tosh.
"Takeda shareholders no problem, they do what the board recommends".
What a load of BS.
Have you seen who owns the Takeda shares? We're not talking about Japanese individuals who will no doubt follow the Board. But they are irrelevant.
International funds and Hedgies will not give a damn about the Board's recommendation. They will need persuading that it is a good deal before they vote. A significant part of Takeda is owned by European and US funds. They want to make money and will make whatever decision they see fit.
Luckily 2/3rd is easier than 75%.

But the 75% for Shire holders is an absolute slam dunk. Their alternative is not worth contemplating. Do I take £48 ish by accepting or drop back to mid £30s if not. And none of the big funds will have any issue with Japanese shares based on US ADRs. None, so no issue there.

I think the Takeda shareholders will eventually vote for this in December but it will take a lot of persuasion from Weber over the next six months. This is by far the biggest single risk associated with this deal.

[redtom1] 11/5/2018 12:35

Takeda Pharmaceutical Co. investors may belatedly be coming around to the view that the $62 billion purchase of Shire Plc is the best thing that could have happened to the Japanese drugmaker.

Just consider the alternatives.

To get the same U.S. exposure, and generate cost savings, Takeda might have looked to Celgene Corp. or Biogen Inc., according to Datamonitor Healthcare analyst Edward Thomason. The former has a burgeoning cellular immunotherapy presence and an impressive multiple myeloma portfolio, while the latter has a strong neuroscience focus.

But buying Celgene or Biogen would have set Takeda back even more. Celgene’s market value has slipped but it’s still worth about $60 billion; Biogen, which generated revenue of $12.3 billion last year, is capitalized at $58 billion. Tack on the almost 65 percent premium that Takeda offered versus where Shire was trading a few weeks ago and you’re talking an awful lot of money.
Smaller targets would have come with their own drawbacks.

Connecticut-based Alexion Pharmaceuticals Inc., with a market value of $26 billion, would have been a lot easier to digest, but it doesn’t have many promising drugs beyond current blockbuster Soliris. BioMarin Pharmaceutical Inc., which competes with Shire in hemophilia medicine, is cheaper still but has a smaller U.S. exposure.

Ultimately, Shire is an expensive acquisition, and the $1.4 billion in cost savings that Takeda is promising won’t move the needle much. The price tag will also put pressure on Takeda’s already strained finances, with the group planning to bring net borrowings to two times Ebitda within three to five years. The Osaka-based group’s desire for geographic reach and drug diversification also saw it overlook warts such as looming competition in Shire’s hemophilia business.

But the company’s strength in rare-disease drugs is a big advantage. People requiring such pharmaceuticals are about the sickest patients you can get. They need treatment for life, and businesses can charge high prices.

Maybe Takeda, like several other Japanese firms that have bought companies offshore, botches this one up. Moody’s Investors Service has already trimmed its credit rating, and the new level is under review for further downgrade. Holders of the company’s $500 million 2.45 percent notes are certainly rattled, sending the bonds down to a record low of 94.66 cents on the dollar Wednesday.

Or maybe, in taking a risk, Takeda will cement its place in the global pharmaceuticals market. With its stock rallying as much as 3.7 percent Thursday, it seems some shareholders at least share the view that in Shire, Takeda has found the savior it sorely needed.

[montyhedge] 11/5/2018 12:24

He can charm all he wants, 75% is a lot to charm. Japanese shares for Shire Holders, really.

Takeda shareholders no problem, they do what the board recommends, Shire not so sure.

[tjb23] 11/5/2018 12:19

I'm no expert, but I would imagine the funds wanting this deal to succeed would now be buying shares cheaply, increasing their holding and voting rights, and thereby cementing this deal as a near certainty

[ruethewhirl] 11/5/2018 10:46

Read somewhere that Takeda had been seriously eyeing up Shire for two years prior to offer.

Surprising they managed to keep it under wraps for (most of) that time.

[philanderer] 11/5/2018 09:19

Good work TM.

So it's 66% approval needed by Takeda holders and 75% SHP approval

Takeda boss arrives in the UK next week for the start of the charm offensive 😉

[redtom1] 11/5/2018 09:15

Good job Toffeeman.
And is this list that causes the uncertainty for this deal. Shire shareholders will definitely vote for it. There is no doubt whatsoever unless the Takeda share price fell another 20% or so which looks highly unlikely.

But Takeda shareholders are spread around the globe with a lot in the US. They are the ones that need persuading. Luckily only need a 2/3rds vote for Takeda. This is where the focus will be before the votes in December.

[toffeeman] 11/5/2018 09:09

Here is a list of significant investors in Takeda - most of which are not Japanese - there you go Monty (sorry about the formatting)- but I reckon that it is about 30% of the market cap



Holder #
Capital Research and Management Company 35,457,800
Nomura Asset Management Co Ltd 22,618,000
Vanguard Group Inc 17,993,910
BlackRock Fund Advisors 15,093,318
VA CollegeAmerica Cap World G/I 529E 12,506,600
Wellington Management Company LLP 10,820,512
VA CollegeAmerica EuroPacific Gr 529F 10,608,600
Vanguard Health Care Inv 10,581,700
Vanguard Total Intl Stock Index Inv 10,278,417
Nikko Asset Management Co Ltd 10,036,800
Daiwa Asset Management Co Ltd 9,373,200
Government Pension Fund of Norway - Global 5,832,258
VA CollegeAmerica Invmt Co of Amer 529E 5,565,800
Causeway Capital Management LLC 5,063,000
Causeway International Value Instl 4,547,000
Mitsubishi UFJ Kokusai Asst Mgmt Co.,Ltd 4,180,200
Vanguard Developed Markets Idx Admiral 4,177,439
Teachers Advisors Inc 3,005,562
WisdomTree Asset Management Inc 2,767,590
WisdomTree Japan Hedged Equity ETF 2,581,163
VA CollegeAmerica Cap Inc Bldr 529E 2,502,000
BlackRock Advisors (UK) Limited 2,383,985
iShares Core MSCI EAFE 2,370,500
Mondrian Inv Intl Equity CF 2,055,460
Mondrian Investment Partners Ltd 2,055,460
Sanderson Asset Mgt Intl Val Eq 1,777,900
Sanderson Asset Management LLP 1,777,900
BlackRock 1,678,391
Fidelity Management & Research Company 1,593,742
American Funds IS® International 3 1,571,700
BlackRock EAFE® Equity Index T 1,504,700
CREF Stock R1 1,395,529
American Funds NVIT Growth-Income II 1,364,900
BlackRock Japan Co Ltd 1,334,100
iShares MSCI EAFE Minimum Volatility 1,218,800
Charles Schwab Investment Management Inc 1,150,067
VA CollegeAmerica New World 529F 1,109,000
Principal Management Corp 1,052,800
Fidelity Spartan® International Idx Inv 1,049,542
Principal Overseas Instl 964,900

[philanderer] 11/5/2018 08:58

A long wait to find out monty. 😏

[montyhedge] 11/5/2018 08:42

75% to pass, all down to the big boys, do they or can they hold Japanese shares.