Takeda sounds out banks for loans as it moves towards Shire bid: sources

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TOKYO (Reuters) – Takeda Pharmaceutical (4502.T) has sounded out its major creditors for loans, two sources with direct knowledge of the matter said, as it moves closer to a bid for London-listed rare-disease specialist Shire (SHP.L) that could top $40 billion.

FILE PHOTO: Takeda Pharmaceutical’s signboard is seen on its headquarters building in Tokyo, Japan January 30, 2018. REUTERS/Kim Kyung-Hoon/File Photo

Expectations that Japan’s largest drugmaker by sales will bid for Shire before an April 25 deadline have mounted since its chief executive Christophe Weber discussed the strategic case for the deal at a briefing with analysts last week.

Weber said at the briefing, which was closed to the media, that Takeda was weighing a deal for all of Shire and there was scope to increase debt, according to analysts.

Takeda has sounded out creditors including its main bank Sumitomo Mitsui Banking Corp, the two sources said on Thursday, declining to be identified as the matter was confidential.

Kyodo News reported earlier that Takeda was looking for loans of several trillion yen (tens of billions of dollars) in total from multiple banks.

FILE PHOTO: Vitamins made by Shire are displayed at a chemist’s in northwest London, Britain, July 11, 2014. REUTERS/Suzanne Plunkett/File Photo

Shire shares have risen 17 percent to value the company at around $46 billion, or $9 billion bigger than Takeda, after the Japanese firm said on March 28 that it was considering a bid for the London-listed drugmaker.

At that valuation, a successful bid would be the largest ever overseas acquisition by a Japanese company and propel Takeda, helmed by Frenchman Weber, into the top ranks of global drugmakers.

Under UK takeover rules, Takeda has until April 25 to decide whether to make a bid.

Representatives for Takeda, Shire and Sumitomo Mitsui Banking Corp, the core banking unit of Sumitomo Mitsui Financial Group Inc (8316.T), were not immediately available for comment.

Takeda shares ended down 1.2 percent in Tokyo trading on Thursday. The company’s shares have fallen more than 9 percent since it was first reported they were considering bidding.

Takeda investors have been skeptical about the merits of a Shire deal, given the size of the potential purchase and the likely need for a large share issue, which could be highly dilutive.

Weber told analysts at last week’s briefing that size was no obstacle for any “mindful” acquisition and Shire could accelerate his company’s transformation.

The drugs industry has seen a surge in dealmaking as large players look for promising assets to improve their pipelines.

Swiss drugmaker Novartis (NOVN.S) announced an $8.7 billion deal earlier this week to buy a rare disease treatment specialist AveXis (AVXS.O).

Reporting by Sam Nussey and Taro Fuse; Writing by Miyoung Kim; Editing by Edwina Gibbs and Muralikumar Anantharaman



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