Yahoo Finance Shire sells oncology unit for £1.7bn as Takeda boss prepares potential bid
Drugmaker Shire has agreed to sell its oncology business to a French rival, putting into question whether a bid for the FTSE 100 firm from Japanese suitor Takeda will emerge.
Shire is selling the oncology business to Servier, a pharmaceutical company governed by a non-profit foundation, for $2.4bn (£1.7bn).
The deal comes as Takeda boss Christophe Weber is understood to be lining up meetings with its major holders ahead of making a potential £35bn offer for Shire. Its biggest investors include US-based Blackrock, Capital Group and JP Morgan.
The oncology unit sale is expected to close in the second or third quarter of the year and Shire boss Flemming Ornskov said the firm would “consider returning the proceeds of the sale to shareholders through a shareholder-approved share buyback after the current offer period regarding Takeda's possible offer for Shire concludes".
Oncology was an area that Takeda had identified as a driver for its potential takeover approach. It said last month that any deal would strengthen its core therapeutic areas of developing medicines for cancer, gastroenterology and neuroscience.
Last year the oncology business made $262m of revenue and Mr Ornskov said the company had "concluded that it is not core to Shire's longer-term strategy", adding that the drug maker could make further "selective disposals of non-strategic assets".
Emmanuel Papadakis, an analyst at Barclays, said that the deal was "likely to obfuscate the probability of Takeda's current approach".
Meanwhile, Peter Welford, an analyst at Jefferies, said that the deal "should also boost Shire's negotiating position on asking price in the current offer period with Takeda", but he added that there could be "incremental risks" to an acquisition due to the "ongoing complex integration" of Baxalta, the former bioscience business of Baxter that Shire merged with in a $32bn deal in 2016.
Analysts at Credit Suisse said: "Given the oncology business is a small part of Shire we believe the deal shouldn't severely impact the decision to make an offer."
They added that they did not believe that the move by Shire was aimed at frustrating an offer from Takeda, which is prohibited under the UK Takeover Code.
Shire said it had begun the process of selling the oncology business in December, with potential buyers identified in the US, Europe and Japan. Takeda's mooted interest in bidding for Shire was announced in March.
The UK Takeover Panel gave Takeda a deadline of April 25 to announce a firm intention to bid or walk away.
Concerns have been raised by analysts that Takeda will struggle to fund the takeover, as Shire is worth £7bn more than the Japanese group. The Japanese firm is thought to be considering splitting Shire and selling its neuroscience division in order to help finance the deal, The Sunday Telegraph reported.
Shares in Shire were down 1.4pc at £35.56 this afternoon.
