Shire rumored to be shopping for Swiss biotech

U.K.-based company’s reported $18.9-billion offer sends Actelion shares soaring, but apparently not its heart

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LONDON & ZURICH—Following hot on the heels on rumors that Pfizer seeks to acquire Swedish company Sobi comes scuttlebutt that Irish company Shire plc has made a rather large offer to Switzerland-based company Actelion Ltd.—one of Europe’s largest biotechnology companies.
Shares of Actelion stock skyrocketed to an all-time high June 8 on news of the supposed deal-making, while Shire’s stock price took a hit. The reported $18.9-billion offer is part of an effort by Shire to improve and expand its rare-disease pipeline—which, interestingly enough given our mention of the earlier deal above, is exactly what Pfizer is looking to do in trying to woo Sobi.
This deal also follows on the recent deal in January under which Shire agreed to buy U.S.-based NPS Pharmaceuticals Inc. for $5.2 billion.
In a note to investors, James Gordon at JPMorgan Chase & Co. wrote, “We find the concept of an Actelion bid plausible, in light of Shire’s stated aspiration to pursue further significant M&A, with a preference for deals in the rare disease space.”
Both Shire and Actelion have remained mum about any supposed behind-the-scenes talks.
Various market-watchers have reported, though, that the initial “soft offer” of nearly $19 billion was rejected by Actelion. Whether numbers are being bandied around and negotiations ongoing—or whether Shire might attempt a hostile takeover—remains unknown.
UBS AG analyst Guillaume van Renterghem wrote in an investor note that he thought it unlikely Shire would make a higher offer and even less likely they would become aggressive, noting, “Over the last 10 years we are not aware of a situation where Shire would go hostile.”
Analysts at Deutsche Bank and Berenberg Bank have chimed in to say that a 30-percent or more premium to Actelion's share price as of June 5 might be needed to seal a deal. As it stands, the supposed offer from Shire would have been more in the neighborhood of a 20-percent premium to the share price right before news of the deal-making broke, thanks to U.K-based newspaper the Sunday Times, which cited unidentified sources in the financial industry in reporting Shire’s bid.
Richard Parkes, a Deutsche Bank analyst, has noted that an acquisition of Actelion would provide a rare-disease pipeline boost—and engine for growth—for Shire, plus a late-stage pipeline in infectious diseases and multiple sclerosis.

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