A bidding war for the maker of Adderall stalled out after just 4 hours

  • Shire rejected Takeda‘s $US60 billion takeover bid on Thursday morning.
  • Allergan then confirmed it was “in the early stages of considering a possible offer” for Shire, potentially creating a bidding war for the $US50 billion drugmaker.
  • That sent Allergan’s stock price spiraling, down more than 8%.
  • Allergan said Thursday afternoon that it did not intend to make a bid.

A $US60 billion bidding war over Shire, the maker of ADHD medications like Adderall, stalled out after four hours on Thursday.

Shire rejected an offer of that amount from Japan’s Takeda. Shire said in a statement Thursday that Takeda’s $US60 billion bid “continues to significantly undervalue the company and Shire’s growth prospects and pipeline.”

Allergan then confirmed around 10:20 a.m. that it was “in the early stages of considering a possible offer” for Shire, following a report from Reuters. That sent Allergan’s stock price plummeting, falling more than 8%.

CNBC then reported Thursday afternoon that Allergan would not make a bid for Shire, with Allergan’s share price rebounding. A little after 2 p.m. Allergan confirmed that it does not intend to make a bid on Shire.

“Allergan continues its ongoing process of evaluating a full range of potential strategic actions that will create value for shareholders, such as divestitures, combinations and acquisitions,” Allergan said in a statement.

So Allergan went from “considering a possible offer” to walking away from a bid within four hours.

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A potential deal between Shire and Takeda is still on the table, however.

In addition to making medications like Adderall and Vyvanse, Shire focuses on rare diseases like the blood disorder hemophilia. Takeda, a 300-year-old Japanese drugmaker, has been working to expand its global footprint, most recently with its $US5.2 billion purchase of Ariad Pharmaceuticals, a US cancer-drug maker, last year.

Takeda’s $US60 billion bid was a 50% premium on Shire’s stock price on March 27, the day before Takeda approached Shire. It was the third offer Shire’s board had received from Takeda.

Takeda said in a statement that it was still having conversations with Shire’s board about a potential offer.

“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, with a balanced geographic footprint, a robust, modality-diverse pipeline and enhanced financial strength,” the statement said.

The Bernstein analyst Ronny Gal said the conversations going forward would most likely have to do with giving Shire shareholders a deal involving more cash; its latest offer contained about 60% in Takeda stock.

“We presume the current discussion between Takeda and Shire reflects, in part, effort to improve the cash/equity component,” Gal said.

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