Japan's Takeda considering approach for British drugmaker Shire

By Kate Holton and Thomas Wilson

LONDON/TOKYO (Reuters) - Japan's largest drugmaker Takeda Pharmaceutical is considering a bid for London-listed Shire to help expand in rare diseases, hyperactivity drugs and the United States, sending Shire shares up 25 percent.

With a market value of 32.7 billion pounds ($46.3 billion), Shire provides treatments against rare diseases and attention deficit disorder. In January it announced a plan to split the group into two separate businesses to boost performance.

Takeda said its approach for Dublin-based Shire was "at a preliminary and exploratory stage and no approach has been made to the board of Shire". It has until April 25 to decide whether to make a bid.

Shire has been under pressure in the last year, with its shares down 24 percent, due to greater competition from generic drugs and a debt pile that stems from its biggest ever deal, the $32 billion acquisition of Baxalta in 2016.

Takeda said a deal for Shire would create a global biopharmaceutical leader and strengthen its presence in the treatment of rare diseases and the oncology, gastrointestinal and neuroscience sectors.

It said it would also balance Takeda's geographic focus to align with the market opportunity in the United States.

"Clearly defined strategic and financial objectives are core to Takeda's disciplined approach to acquisitions, including in relation to its dividend policy and credit rating, which are well-established," it said in a brief statement.

"Any potential offer for Shire, if made, would have to align with this strict investment criteria."

FRENCH CEO

Takeda, Japan's largest drugmaker by sales, focuses its research on developing treatments for cancer and diseases of the digestive and nervous systems.

Takeda has made no secret of its ambitions to become a more global company through acquisitions, although buying Shire would be the boldest move yet by its French CEO Christophe Weber.

Takeda could face competition.

"Takeda publicly saying it is considering an approach for Shire inevitably means that other big pharma players including AbbVie, Novartis, Pfizer et al will equally be running the numbers with a very high likelihood of leading to a competitive M&A multi-bidder situation," said Michael Wegener, managing partner of Case Equity Partners.

Case Equity Partners has a stake in Shire.

Weber, a former GSK executive, was appointed CEO in April 2015 and has already done a number of deals.

In January the company agreed to buy Belgian biotech group TiGenix NV for 520 million euros, funding the deal with cash on hand.

Last year it bought U.S. cancer drug specialist Ariad for $5.2 billion to try to secure stable revenue growth via burgeoning therapeutic markets, such as treatments for cancer or rare diseases. It flagged at the time its appetite for more deals to bolster its drug portfolio.

Takeda's overseas deals mirror those by other Japanese companies, which are facing bleak prospects at home as a rapidly shrinking population weighs on domestic demand.

Shire did not immediately respond to a request for comment.

($1 = 0.7061 pounds)

(Additional reporting by Rahul B in Bengaluru, Paul Sandle and Maiya Keidan in London and Ben Hirschler in New York; Editing by Louise Heavens and Keith Weir)