Baxalta Inc Shares Soar As Shire PLC Prepares New Takeover Offer

Baxalta shares spiked this afternoon before coming back down a bit on rumors that Shire is preparing a new bit for the U.S. biotech firm.


Shire looks to continue U.S. shopping spree with Baxalta

Nearly four months ago, the drug-maker Shire made an unsolicited bid for BXLT valuing the company around $30 billion. Baxalta rejected that bid in August feeling that Shire had drastically underbid for the company that was founded earlier this year (July) following the spin-off of Baxter International’s biopharmaceutical division. At the time of the bid, Shire valued shares of Baxalta and its $22.7 billion market capitalization at $45.23 as Shire looked to put together a portfolio of expensive treatments for “orphan” diseases including rare blood conditions, cancers and immune system disorders.

Shire, rather than increasing their bid significantly, set its sight’s elsewhere and just three weeks ago it bought Dyax Corporation, a rare disease specialist, for $5.9 billion. However, it appears that Shire really wishes to build on that purchase and is reportedly preparing another bid for Baxalta with the help of Morgan Stanley, Deutsche Bank and Evercore.

If Shire and its bankers could complete the deal, the purchase of BXLT when put together with the acquisition of Dyax, would see Shire with a rare disease drug portfolio with over $20 billion in sales and double-digit annual sales growth.

None of the participants in the potential deal have commented publicly on the potential new bid.

Source says Shire still very keen on Baxalta

Reuters is reporting that its source claims that Shire Chief Executive Flemming Ornskov has been relentless in his pursuit of BXLT since the spin-off from Baxter International.

“He’s never given up,” the source said.

Ornskov also made this clear during the purchase of Dyax earlier this month when he said, “Even with this transaction, we will continue to have the financial firepower to pursue other value-added strategic acquisitions, including Baxalta.”

The August pursuit of Baxalta fell short for a couple of reasons and a future acquisition attempt may also fail. BXLT is being advised by Goldman Sachs which believes that the company spun-off just this year will see its shares rise when more investors become familiar with the company. Additionally, BXLT has a “poison pill” in place that would make it very difficult for anyone looking to takeover Baxalta from obtaining more than 10% of its shares or putting its own board members in place.

Baxalta’s trading day

BXLT  opened the day at $33.20 and traded slightly down until bid rumors came into the fold around 3:10 EST with the stock trading at $33.04. Within ten minutes, Baxalta was trading at $37.22. The stock came back to earth a bit when it finished the day at $35.70 for a gain of well over 6% on the day.