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Shire finally seduced by Takeda

Pharmaceuticals, drugs

Pharmaceuticals, drugs

European equity markets are mixed this morning, with the FTSE 100 in positive territory after reopening following yesterday’s bank holiday. 

Continental market pusher higher yesterday, and today it seems the FTSE is making up for lost time. Meanwhile, eurozone indices have been hit by some profit-taking.

After several weeks of to-ing and fro-ing, Shire’s board finally accepted a takeover offer from Takeda, in a deal worth £46 billion. Shareholders in Shire will receive £24 in cash per share and a 0.839 share in Takeda. If the offer is accepted by Shire shareholders, it will be the biggest deal in the pharmaceutical industry since 2000. Shares in Shire have been given a nice boost in recent weeks after Takeda made two unsuccessful bids for the company. On the other side of the coin, Takeda’s share price has dropped over 30% since the January high, and given the negative market reaction to their pursuit of Shire, there may be some investors who are sceptical about the offer.

Firstgroup shares are in the red after Apollo Global Management said it is no longer interested in acquiring the company. Last month, the US private equity firm made an offer for Firstgroup, which sent the share price of the British company higher. The stock is now back near its level prior to the takeover attempt. 

GBP/USD is lower again today after the strong US dollar and disappointing UK house price figures added to it woes. According to the Halifax house price index, UK house prices slipped by 3.1% in April far greater than the 0.2% decline dealers were expecting.

EUR/USD is largely unchanged on the day, after the better-than-expected German industrial production figures failed to spark a rally in the single currency. In March, industrial production increased by 1%, while economists were expecting a rise of 0.8%. The number compares favourably with the February figure, which saw a drop of 1.6%. The euro has been losing ground against the US dollar lately, and we haven’t seen any signs of a turnaround yet.

We are expecting the Dow Jones to open down 27 points at 24,330 and we are calling the S&P 500 down 5 points at 2667.

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