Takeda Pharmaceutical Co. shareholders voted for their mega share to buy Europe's Shire PLC on Wednesday and smashed an opposition…
Takeda Pharmaceutical Co. shareholders voted for their mega share to buy Europe’s Shire PLC on Wednesday and smashed an opposition campaign that sought to track the Japanese company’s largest foreign acquisition.
At least 88% of the votes cast were, according to Takeda, who made a blow to a group of long-term shareholders who had lobbied to block the merger on cash and valuations, valued at approximately 58 billion dollars today. The participants claimed that Takeda overpaid for Shire and incurred too much debt to do so.
The vote was a resounding victory for France’s born CEO Christophe Weber, one of the few foreigners at the root of a big Japanese company. Buying Shire would allow Takeda to step into the lucrative market for rare diseases and increase mr. Web’s mission to expand Takeda’s footprints in addition to the slow home market.
The deal is subject to approval by Shire shareholders, who will meet in London later on Wednesday.
The acquisition drives 237-year-old Takeda to the major leagues, making the combined entity the world’s eighth largest drug broker through sales and reflects how Japan’s company’s titans are looking abroad to drive growth. Together, companies would appreciate earning half of their revenues from the US, up from about a third as Takeda is doing now. Takeda also estimates that annual savings would amount to at least $ 1
.4 billion three years after the merger.
Mr. Weber has previously rotated shareholders, cut jobs for the purpose of consolidating research and hiring other non-Japanese senior executives. However, the Shire acquisition was his boldest move since he took the 2014 pillars.
In a sign of the magnitude of Japan’s elderly company overseas Takeda increased its bid four times after Shire’s board agreed in May to settle for a cash and-stock offer that valued it at £ 49.01 or $ 66.21, a share at that time, a 65% premium over Shire’s closing stock price before the news about the deal occurred at the end of March.
It added Takeda’s valuation of Shire of $ 62 billion just then. Currency fluctuations and a fall in Takeda’s share price means that today’s value is $ 58 billion. It is still continuing that SoftBank Group Corp. acquires $ 32 billion on British-based chip designer ARM Holdings PLC 2016. The biggest foreign acquisition of a Japanese company so far.
On Wednesday, Takeda’s share closed 1% from Tuesday’s closing, although it is down 25% since the news of the first bid occurred at the end of March. Shire shares have won more than 50% over the same period.
Critics claimed the acquisition hall Takeda with debt. The company has said that it would borrow about $ 31 billion to finance the deal, which puts its net debt at five times before interest, tax, depreciation and amortization. The higher the ratio, the lower the chance lender advance loan, which limits the company’s ability to borrow in the future.
Members of the deviating shareholders group argued that Takeda paid too much for a rare disease-focused target whose most-selling hemophilia drug is facing tough competition from a Roche Holding AG rival recently approved by the United States.
The “no” fighters, called its TTBF group or “Think about Takeda Bright Future”, employed a former UBS Group AG analyst to lobby US institutional investors to vote against the deal. In recent weeks, the group won another prominent shareholder, a former Takeda chairman, who was the last member of the founding Takeda family who runs the company.
At a lunch in New York at the end of October, Shigeru Mishima, former UBS analyst, warned 20 institutional investors, primarily US hedge funds, about the risks associated with the deal. “” I said, “What will happen in three years when the risks associated with hemophilia treatment play out?” He said.
Mr. Mishima said the group was disappointed by Wednesday’s vote, even though they knew they would probably fall away from the third of the votes needed to stop the deal.
Mr. Weber said in a statement that he was pleased that the shareholders had backed the acquisition. CEO said he is working to create “a more competitive, flexible, highly profitable and therefore more resilient company”.
The test for Takeda, analysts said, will be its ability to integrate Shire’s empire with its own and if expected job cuts would lead to a backlash in Japan.
Several prominent foreign CEOs in Japan have seen their terms end in controversies or scandals. Recently, Carlos Ghosn was appointed chairman of Nissan Motor Co. after being arrested in Tokyo with suspicions of emphasizing his compensation in financial reports. Mr Ghosn has wrongly denied, according to the Japanese public broadcaster NHK, and has not been formally charged.
Mr. Weber told the Wall Street Journal 2014 that when he joined Takeda, he sought advice from the French trained gentleman Ghosn in Paris. Mr Weber said that the talk praised him that he was looking for the challenge to flourish in Japan’s ecological corporate culture.
-Peter Landers contributed to this article.
Write to Preetika Rana at [email protected]