Takeda shares plummeted on Shire deal buzz. Is a buyout now out of reach?

Takeda US facility
Takeda's shares slipped 7% on word that it was weighing an offer for Shire. (Takeda)

While Shire’s shareholders Wednesday celebrated a possible Takeda bid, the Japanese drugmaker’s investors ran for the exits.

Shares sank by 7% after Takeda revealed that it was weighing a bid for Shire, and the slide hurt the pharma’s prospects for financing a deal already raising some eyebrows. Midmorning Thursday, Takeda’s market cap measured just over $40.2 billion, while Shire’s—boosted by deal enthusiasm—sat at $43.2 billion.

RELATED: Takeda confirms it's scoping out Shire for a GI-focused buyout bid of up to $52B

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“Takeda is just desperate to beef up its pipeline, and they’ve been doing small bits of acquisitions on the biotech side. But how are they going to finance $40 billion?” Credit Suisse analyst Fumiyoshi Sakai told Bloomberg. And that's on the low end; some analysts see a successful bid hitting more than $50 billion.

“The impression left by the news is that the acquisition would be an overreach,” Mizuho Securities analyst Hiroshi Tanaka agreed in a note to clients seen by Reuters.

But though industry watchers may have their doubts about Takeda’s available options, there is one move that could make it easier for the company to swallow Shire—and that’s an ADHD spinoff for the Dublin drugmaker.

RELATED: Shire divvies up its operations to prime neuroscience unit for future sale or spinoff

Shire first revealed last August that it was examining options for the unit, which was the company’s bread and butter before it pushed hard into the rare-disease field. In January, the company said it would hang on to the unit for the time being, but it would become its own operating division, setting up a potential divestment down the line.

As Bloomberg notes, though, Morgan Stanley analysts last year pegged the portfolio’s value at about $11 billion—meaning that Shire could make Takeda’s financing job much simpler by jettisoning it. And though Takeda also has neuroscience meds in its stable, the way Bernstein analysts see it, there’s not much potential there for cost-cutting.


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