Japanese drug maker Takeda is facing questions over its ability to finance a debt-fuelled deal for FTSE 100 rival Shire without placing further strain on its stretched finances.
J apanese drug maker Takeda is facing questions over its ability to finance a debt-fuelled deal for FTSE 100 rival Shire without placing further strain on its stretched finances.
Ratings agency Moody’s has warned that Takeda will need to pile on more debt to its already weakened balance sheet if it wants to buy the drug maker.
Shire’s shares jumped by nearly a fifth last week after Takeda’s interest emerged, amid expectations that the Japanese firm’s approach may have started a possible bidding war.
Other big pharmaceuticals players, including AbbVie, Novartis and Pfizer, have in the past been linked with takeover bids for Shire, which specialises in neuroscience and treatments for rare diseases.
W hile analysts believe that a tie-up with Shire would double Takeda’s revenue, the Osaka-based firm would also have to take on the Irish group’s existing debts. Shire, which is led by Flemming Ornskov, its chief executive, has expanded through a series of acquisitions that have seen its annual revenues rise to more than $15bn (£10bn) but have also left it shouldering a £19bn debt pile.
