Shire shares fall 10 per cent after merger with Roberts
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.SHARES IN Shire Pharmaceuticals, the biotechnology group specialising in anti-hyperactivity products, fell 10 per cent yesterday following confirmation the company has agreed a pounds 1.3bn merger with a US pharmaceutical company.
The deal was hatched on a laptop computer when the companies' bosses met for dinner in May.
Although the London market initially reacted favourably to news of the deal with Roberts Pharmaceutical Corp, US investors took fright. Some analysts blamed concerns over Roberts stature relative to Shire. Others said US holders of Shire shares were selling because they thought the deal would leave them holding a depository receipt, a less attractive investment than a fully-listed share. Shire shares ended down 53.5p at 511.5p.
The deal comes after Shire employed bankers Bear Stearns to draw up a shortlist of merger candidates to help it add half a billion pounds to sales. The company was anxious to extend its drugs pipeline, anticipating that sales of its lead product, Adderall, an anti-hyperactivity drug, would decline.
According to sources close to the deal, the advisers booked dinner for Roberts' chief executive, John Sptiznagel and Shire's chief executive Rolf Stahel. Mr Stahel then produced a lap-top computer at the table and said: "This is how I see this working".
Mr Stahel is to become the chief executive of the group, which is to be called Shire Pharmaceuticals. Mr Sptiznagel will become a non-executive.
Mr Stahel hopes the company will be a more attractive marketing partner for smaller biotechnology groups than the major pharmaceuticals players because it would share their dependence on the success of a comparatively small number of drugs.
Sources close to the companies said the deal left Shire's UK rival, Medeva, looking increasingly vulnerable to a bid.
The deal would leave the enlarged group debt-free and still with no European presence. One source said: "Medeva would be the obvious fit."
Roberts will add cardiovascular treatments to Shire's existing portfolio of central nervous system drugs. The deal is expected to be completed in November.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments