Shire Share Discussion Threads

[scfc1] 04/6/2018 15:53

Weber's 'justification' of the Shire deal to Takeda shareholders, in case people have not read this as yet. ATB, Scfc1https://www.takeda.com/siteassets/system/investors/shareholders-meetings/letter_1806_en.pdf

[ali47fish] 04/6/2018 15:41

but if the deal does not go through, the shp shares will tumble monty/

[montyhedge] 04/6/2018 15:13

Upside 23% downside 5% if deal off thats the way I see it. Forecast p.e 10 so cheap without a bid. I reckon a nice dividend in August before all goes through as well.

I thought someone said Japanese investors never vote against a board recommendation, lets hope they are right.

[ali47fish] 04/6/2018 15:08

i am flabbergasted as to the confusing comments here! with both set of shares shp and takeda tumbling is n't it better to sell shp now as either way i would lose instead of closing with a small profit - can someone with insight set out clearly the options please?

[dealy] 04/6/2018 14:56

I agree Month. Takeda looks cheap as well

[montyhedge] 04/6/2018 14:53

Forecast p.e at current price, is around 10. So I think there is a case of higher price even if bid failed.

[montyhedge] 04/6/2018 14:41

Redtom
Whats the calculations your good on this 4800p ?

[montyhedge] 04/6/2018 14:39

dealy
I would have thought around 3900p anyway without a bid, p.e is way below pharma average.

[montyhedge] 04/6/2018 14:27

Always someone knows more than you, shareprice talks this shouting something wrong.

[dealy] 04/6/2018 14:22

what is shire worth without the deal given earnings, weak GBP, rising markets? maybe not far off the current price

[montyhedge] 04/6/2018 14:20

I would be amazed if this went through.

[mbmiah] 04/6/2018 14:11

Hmmm. The deal looks unlikely at the moment.

[fangorn2] 04/6/2018 12:36

Found another link

Takeda shareholders as of march 2018

Japanese Institutional Shareholders 30.98%
Japanese Securities Companies 3.6%
Japanese Business Corps 4.8%
Japanese Individual Investors & etc 25.36%
Total 64.74%


Overseas II 35.22%

[h0me] 04/6/2018 12:36

Japanese being long term investors. Excellent point.

[fangorn2] 04/6/2018 12:22

Redtom,

I hope Nigel has a Japanese tan. How lovely

Haha just seen my typo...corrected!


I totally agree that the Board of Takeda will not want to pull out.
You're missing my point. It is not the Board than concerns me. In fact it is the Board's desire to get this done that gives me some hope of success.

Yes we agree on this part.


But the shareholders have to approve it and many are not Japanese and are not going to vote 'to save face'. That is such a naive view, wow. Welcome to the 21st Century of investing!

Takeda Top 10 shareholders last time I looked

Nippon Life Insurance Co. 44,700,685 5.62%
The Vanguard Group, Inc. 30,224,945 3.80%
Nomura Asset Management Co 24,970,397 3.14%
Capital Research & Management 23,277,500 2.93%
Causeway Capital Management LLC 20,895,826 2.63%
Mondrian Investment Partners 18,060,917 2.27%
Takeda Science Foundation 17,911,856 2.25%
Wellington Management Co. LLP 15,852,289 1.99%
BlackRock Fund Advisors 14,170,800 1.78%
Barclays Bank Plc 13,931,306 1.75%

Some interesting names there.

Whilst I agree it isnt guaranteed that Takeda's shareholders will vote this through - the BOD would have been crazy to push for this leveraged buyout of Shire without consulting their top 10 institutional shareholders..

Irrespective of where this deal is happening (ie Japan), international funds want a good deal for their investors. The buck literally stops with them, period.

Don't dispute that - the Japanese institutional shareholders will vote for the deal barring a major meltdown

But is is most unlikely those non Japanese institutions haven't been in the loop from the off - given the repeated raised offers by Takeda's BOD it is most unlikely that shareholders havent been 1)Consulted 2) Given the nod of approval

M&A doesnt happen on a whim - major shareholders are usually consulted.

It is about money and the Takeda shareholders may force the hand of the Board

For Japanese institutional investors, in similar fashion to Chinese, they take the long term view.

The issue would be with be non japanese institutions.

I don't know which way this will go as there is a long time to go and Weber will be sweet talking to Takeda shareholders.

I concur - it's not a cert that Takeda's shareholders will sign off on the proposed deal but it is most unlikely, imo,that they will not.


I hope he is successful in selling Takeda's future vision but I struggle when people post such black/white statements when we have already suffered a 23% fall in share price since first announced.

Who's posting a black n white statement???

No one disputes that there is the possibility the deal wont happen. Always a chance of that. The question is what probability to ascribe to such an outcome.

The deal in is the balance is all I am saying and not a done deal.

Concur it's NOT done done & dusted yes

But bottom line, Takeda Board will have to pull deal if they don't get the 2/3rds vote. And that is by no means certain despite the rose tinted spectacles that you wear.

I'm not wearing rose tinted specs fyi!
I just ascribe a higher probability on the deal closing for the simple reason that Takeda needs Shire - it's a $1bn break up fee to walk away,and the Japanese are Long term investors generally

How is that rose tinted specs exactly?

[nigelpm] 04/6/2018 11:30

You are missing the point being:

"Takeda pulling out" meaning they withdraw their offer

Your definition isn't Takeda pulling out - it's shareholder voting it down.

So we agree.

[redtom1] 04/6/2018 11:27

Nigel, thank you for replying.
But I am confused by your replies. You say that you are not confident that the vote will go through.
But given the deal can ONLY happen if they vote yes, how can you state that they won't pull out? They would have to if the vote goes no.
So surely you must be extremely confident of a yes vote otherwise you can't possibly be confident that they won't pull the deal?
Do you see where I coming from?
If there's any doubt in the vote then there is a chance that the deal will be pulled.

The Board has zero intention nor want to pull the deal and if this is what you mean then I agree (ie excluding the shareholder vote). But the Board will have to abide by the shareholder vote and will be forced to pull out if a no vote.

[nigelpm] 04/6/2018 11:13

Redtom, I suspect you’re wasting your time with some who will only ever see the positives. That’s fine for them, but you clearly post it as you see it and have more ‘skin in the game’ on here than any other posters I expect. Seeing both sides is always the best way to invest and/or change.

Not in my case - of course the deal may get voted down - that wasn't the point.

I was merely making the point that Takeda won't pull out. It's a simple point.

[scfc1] 04/6/2018 11:08

One other point. Buying something you can't really afford ie. without needing to sell some of the big parts (divisions) soon after completion is not the way to achieve the best price. The whole strategy by Takeda has looked pretty questionable from the very start...why not just buy the parts you want and/or can afford rather than the strategy they have taken?!?

[nigelpm] 04/6/2018 11:05

Why do you think that Takeda are not going to have to pull thier offer given the Takeda SP?


Because the share price is irrelevant to their intentions.



Are you very confident that Takeda will vote this through?

No.

[scfc1] 04/6/2018 11:02

You make some valid points but I think these will be trumped by the relief of this not happening - certainly if you're a Takeda PI shareholder - Takeda is currently valued at little over $30bn, whereas at the start of the bid process it was about 25% higher so $1bn fee is small in comparison. Interesting weeks ahead for sure.Looking at the relative market cap sizes as of now, this 'takeover deal' looks bizarre!...ATB, Scfc1

[redtom1] 04/6/2018 10:59

Badwood, great post and those are all good points.

I guess my simple premise is that if a potential deal causes the share price to drop 23% (and most this drop does appears to be stock specific rather than market driven) then the reversal of that action should have an opposite impact. I'm guessing that it wouldn't rise 23% but I would not be surprised to see a 10%+ rise.
As you correctly state there is the 'loss' of $1bn+ for break fee and other costs so this would have some negative impact too.

I also like your last point and it would be great to hear more about the future strategy. I think this is the key to the current malaise. Without this guidance, shareholders of both Shire & Takeda have little to judge against, hence the slow bleed.

[badwood] 04/6/2018 10:48

It is not clear to me why the Takeda share price would necessarily go up significantly if Takeda shareholders voted down the merger for the following reasons:

Firstly, they would incur a penalty fee for pulling out of the deal (someone suggested the penalty fee is around one $1bn) which would suppress the share price.

Secondly, the chief executive Christophe Webber and most of the board would most probably have to resign or be sacked. That would create uncertainty which would have a serious negative impact on the share price.

Thirdly, a number of commentators have put forward the view that Takeda needs to invigorate its pipeline of drugs, and without Shire their long term prospects look uncertain.

Will the deal go ahead ? I assume that the majority of current Takeda shareholders are in it for the long haul. Therefore, those who vote to scupper the deal will be far more concerned with the burden of debt Takeda would be saddled with rather than the potential of a short term share price surge in the event of a no deal.

A crucial consideration in all of this is the parts of Shire Christophe Webber intends to sell on and whether he has buyers lined up. Presumably he will provide guidance to Takeda shareholders before the vote.

[scfc1] 04/6/2018 10:47

Redtom, I suspect you're wasting your time with some who will only ever see the positives. That's fine for them, but you clearly post it as you see it and have more 'skin in the game' on here than any other posters I expect. Seeing both sides is always the best way to invest and/or change.Only seeing the positives and ignoring the facts is the easiest way to lose money. I'm not referring to panic selling but if the £ recovers v $ and the Takeda share price continues to decline, then there inevitably will be a point where this is voted down. That said, big funds do see things differently to us PIs but the latter would absolutely vote against this surely...and if they look at the damage the huge debt burden did to the Shire share price then they would probably see this even more starkly. ATB, Scfc1

[redtom1] 04/6/2018 10:43

Shire just dropped to 3950p