BBH and IBT set to reap rewards on Shire stake
London-listed BB Healthcare (BBH) and International Biotech Trust (BIOG) are likely to be the main investment trust beneficiaries of the proposed takeover of Shire Pharmaceuticals by Japan’s Takeda, which was agreed – subject to a number of conditions – last week. Shire’s board agreed to recommend a final cash-and-stock bid worth around $64bn, that came from Takeda just ahead of the UK takeover panel deadline.
Under the proposed terms, Shire shareholders would receive a consideration worth £49/share, comprising £27.26 in new Takeda shares and £21.75 in cash. The stock element was, however, based on a share price of ¥4,923, and Takeda’s share price has since fallen back to around c¥4,535. Under the proposals, Shire’s shareholder would own 50% of the enlarged company, which is expected to be listed in Japan and in the US. The takeover/merger will create a new company with pro forma sales of almost $31bn and a net profit of $6bn.
Shire’s US-listed ADRs have risen from $126 last month to around $158 currently, which should provide a significant boost to the trusts’ NAV performance in April and the year to date period.
Shire is BB Healthcare’s third largest holding, accounting for 5.7% of NAV, and is the second largest holding, at 4.8% of NAV, for IBT. Polar Capital Global Healthcare (PCGH) also has exposure to the deal, by virtue of its investment in Takeda. This accounted for 3.6% of the fund’s NAV in fFeburary, but has since dropped out of the fund’s top 10 holdings.
BBH and IBT set to reap rewards on Shire stakes