Published: Mon, April 16, 2018
Business | By Tara Barton

Shire's $2.4bn oncology sell-off seen as Takeda spoiler

Shire's $2.4bn oncology sell-off seen as Takeda spoiler

LONDON, April 16 (Reuters) - Shire, the London-listed rare diseases specialist that is a potential takeover target for Japan's Takeda Pharmaceutical, is selling its oncology business to unlisted French drugmaker Servier for $2.4 billion.

The firm, which has its headquarters in Dublin, started looking at offloading the oncology business in December, and said the process considered "multiple potential strategic buyers" across Europe, Japan and the US.

In addition, a tie-up would help realise the Japanese company's R&D strategy, drive financial value and allow it to exploit further opportunities in the US. Takeda's interest in Shire was made public only at the end of last month.

But the move also means Shire becomes less attractive to Takeda, which has until 25 April to formally announce a takeover bid under United Kingdom stock market rules, after expressing an interest earlier this month. Shire also had debt of around $19 billion as of the end of 2017.

Shire Chief Executive Flemming Ornskov said the sale of the oncology business to Servier demonstrated the value embedded in Shire as shares in the company rose 0.5 percent by 0835 GMT.

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"The proceeds from the transaction increase optionality and Shire's Board will 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".

Shire has always been seen as a likely takeover target and was almost bought by US drugmaker AbbVie in 2014, until USA tax rule changes caused it to walk away.

If a deal were to be struck, it would see the hunter become the hunted after Shire itself went on the acquisition trail only two years ago when it bought Baxalta for 32 billion U.S. dollars (£22.6 billion).

Shire announced in a statement this morning that it had inked a deal with Servier to sell its oncology business for $2.4 billion.

Shire's oncology business includes marketed products Oncaspar (pegaspargase), a component of multi-agent treatment for acute lymphoblastic leukaemia.

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