Takeda Pharmaceutical Co Ltd shares lost nearly 5 percent of their value on Friday as investors fretted over the size of any deal the Japanese firm would have to make to seal its record-breaking purchase of London-listed Shire PLC.
Last month Takeda announced it may make an offer to buy Shire.
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The second bid on 11 April valued Shire at £43 billion, with shareholders in the UK-based firm owning 51% of the enlarged Takeda.
As per the third proposal, Takeda offered Shire to take a stake of almost 51% in the enlarged company post acquisition.
"The rejected bid is not unreasonable, in our view, at a +12% premium to [net present value], but the Board may feel it is opportunistic and undervalues synergies plus potential growth". After speculation in the press, Allergan confirmed it is "in the early stages of considering a possible offer for Shire" among the strategic options it is evaluating.
The firm has emerged as a takeover target after a string of acquisitions, including a $32 billion merger with rare disease firm Baxalta in 2016, have proved unpopular with investors.
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Shire plc is a biotech company focused on serving people with rare diseases and other specialized conditions.
Takeda's latest cash-and-shares offer was pitched at the equivalent of £46.50 per share, valuing Shire at £42 billion.
Jasper Lawler, head of research at London Capital Group, said: "Shire's latest refusal, as well a deal to offload its oncology division, a prize asset that would have been complimentary to Takeda's portfolio, could be the final nail in the coffin of the merger".
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Shire rejected an offer of that amount from Japan's Takeda.
The two earlier cash-and-share offers were worth 44 and 45.50 pounds per share, respectively. Shore Capital reiterated a "buy" rating on shares of Shire in a report on Friday, February 23rd.
This week Shire said it was selling its cancer treatment unit to France's Servier for £1.7bn in a deal that was initiated in December and was unrelated to the possibility of a takeover bid.
Takeda confirmed it put forth a buyout bid for Shire worth about $66 per share, comprised of cash and stock.