Takeda Takeover Bid for Shire: Analyst View

While we see Takeda's shares as fairly valued, we’ve seen Shire’s shares as significantly undervalued in recent months say equity analysts

Karen Andersen, CFA 29 March, 2018 | 7:44AM

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Japanese pharma firm Takeda said it is officially considering making an offer for diversified rare-disease-focused Shire (SHP) in what would probably be a merger of equals. Both companies have recently traded around the $40 billion market cap level. We are maintaining our fair value estimates for both until we see evidence that discussions are advancing; an official offer is expected in April.

While we see Takeda's shares as fairly valued, we’ve seen Shire’s shares as significantly undervalued in recent months, so the deal could be partly motivated by Shire’s current valuation, as well as the fact that both firms have a significant presence in Cambridge, Massachusetts.

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About Author

Karen Andersen, CFA  Karen Andersen, CFA, is a senior stock analyst with Morningstar.

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