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Wednesday 16 January 2019

FTSE ends up as Shire shares soar on takeover approaches

The Irish drug-maker said that it had rebuffed three offers from Takeda, the latest worth £44 billion.

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By Ravender Sembhy, Press Association City Editor

Shares in Shire raced to the top of the FTSE 100 on Thursday after the pharmaceutical giant looked set to become the centre of a takeover tussle between Botox maker Allergan and Japan’s Takeda.

The Irish drug-maker said on Thursday that it had rebuffed three offers from Takeda, the latest worth £44 billion, because they “significantly undervalued the company, its growth prospects and pipeline”.

Shortly after, fellow Irish firm Allergan disclosed that it is also weighing up a bid for Shire.

The Botox maker said that it is in the “early stages of considering a possible offer for Shire”.

The disclosures sent shares in London-listed Shire soaring, with the stock ending the day up 221p to 3,975p.

David Madden, market analyst at CMC Markets, said: “Shire is popular today after it rejected an offer from Japan’s Takeda, and now there is talk that Allergan are interested in Shire too.

“This sort of play is common in the pharmaceutical sector as Takeda are keen to expand, seeing as patent expires are approaching.

“Allergan is relatively light in cash and heavily indebted, so there are no guarantees this will transpire.”

Shire’s share performance helped the FTSE 100 close up 11.58 points higher on the day, or 0.16%, at 7,328.92p.

At the other end of the top flight, Unilever shares fell 85.5p to 3,861p after the consumer goods giant reported a 5% slump in first quarter sales.

That was despite the firm upping its dividend and announcing a 6 billion euro (£5.2 billion) share buyback programme.

Its results come amid investor opposition to basing its headquarters in Rotterdam.

Unilever last month announced it had chosen Rotterdam over London as its new legal headquarters, sparking a backlash by top-10 shareholder Columbia Threadneedle over a lack of engagement regarding its decision.

On the FTSE 250, Ultra Electronics shares ended at the bottom of the index after the Serious Fraud Office launched an investigation into the group over suspected corruption in Algeria.

Ultra, which makes electronics for the defence sector, referred itself to the authorities, and said it was co-operating with the inquiry.

Shares were down 65p to 1,323p.

The FTSE 250 ended up 0.68%, or 135.15 points, at 20,147.16.

In stocks, Debenhams shares ended the day down over 5%, or 1.32p, at 22p after the embattled retailer saw its half-year profits plunge nearly 85% in the face of extreme weather brought in by the Beast from the East.

The pound ended the day broadly flat against the US dollar at 1.419, while it edged up 0.3% against the euro at 1.150.

Oil was on the up again, with Brent Crude rising over 1% to 74.5 US dollars a barrel.

In Europe, Germany’s DAX ended down 0.2% and France’s CAC was up 0.24%.

The biggest risers on the FTSE 100 were Shire up 221p to 3,975p, Rentokil up 12.3p to 285.2p, WPP up 40p to 1,156p and NMC Health up 96p to 3,596p.

The biggest fallers on the FTSE 100 were British American Tobacco down 209.5p to 3,650p, Standard Life Aberdeen down 13.8p to 367p, Imperial Brands down 70p to 2,355p and Lloyds Banking Group down 1.53p to 66.1p.

Press Association

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