At the same time, sources reportedly told CNBC that Allergan won't make a bid for Shire. Morgan Stanley reiterated an "overweight" rating and set a GBX 5,700 ($81.62) price objective on shares of Shire in a research note on Thursday, February 15th. Shire on Thursday said it had rejected an offer worth around $61 billion from Takeda. Allergan declined to comment, while Shire and Allergan did not immediately respond to requests for comment.
"Building on Takeda's existing momentum, the acquisition of Shire would accelerate its transformation and result in a global, value-based R&D-driven biopharmaceutical leader headquartered in Japan", Takeda said in a prepared statement.
Allergan shares fell 3.4 per cent to $159.97 in NY this morning.
After a review with its advisers and a board meeting on 8 April, Shire's board unanimously rejected the bid, saying it undervalued Shire, its growth prospects and drug pipeline.
Later on Thursday, Allergan Chief Executive Brent Saunders chose to drop his pursuit of London-listed Shire after receiving pushback from some of his shareholders, who were concerned about the company overstretching its resources, according to people familiar with the matter, who asked not be identified discussing confidential talks. This review is now unlikely to lead either to a major acquisition or a breakup of the company, one of the sources said.
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The first bid valued Shire at £41 billion, and would see Shire shareholders owning around 50% of the enlarged Takeda. Both firms say they are willing to continue negotiating.
Shire rejected the £46.50 a share offer that Takeda made on 12 April.
Takeda has been ramping up its takeover ambitions under Chief Executive Officer Christophe Weber, as the company seeks growth overseas amid patent expirations and a shrinking domestic population. Shares in Shire were up 6.3 percent at 39.90 pounds at 1113 GMT in London.
Takeda would need to raise large amounts of capital to buy Shire, which has a bigger market valuation than the Japanese drugmaker. It was the third offer Shire's board had received from Takeda.
Earlier this week it struck a deal to sell its cancer drugs for $2.4 billion to unlisted French group Servier.