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Takeda and Shire shareholders back £46bn drugs takeover

Japanese drugs giant Takeda’s £46bn ($59bn) takeover of Irish pharmaceuticals firm Shire has been approved by both sets of shareholders.

The acquisition, the largest by a Japanese company, propels Takeda into the world’s top 10 list of biggest pharmaceutical companies.

Shire shareholders met in Dublin to approve the deal. Takeda investors gave the green light earlier in the day.

Some Takeda investors objected over fears it will increase the firm’s debt.

The votes to approve the takeover follow a long-running battle in which Takeda made multiple offers for Shire.

On Tuesday, Kazuhisa Takeda, a member of the firm’s founding family, spoke out against the deal over concerns with the level of debt it would add to Takeda.

Takeda plans to finance the takeover via the issue of new shares in exchange for Shire stock, bank loans and bonds.

The takeover is part of Takeda’s strategy to become a global pharmaceutical company. The firm wanted to buy Shire to strengthen its cancer, stomach and brain drug portfolios.

But one of its potentially lucrative treatments will have to be sold off at the direction of European regulators over competition concerns.

“We are delighted that our shareholders have given their strong support to our acquisition of Shire,” said Takeda chief executive Christophe Weber after the investor vote in Osaka.

Shire was founded in the UK, but moved its corporate headquarters to Dublin a decade ago. It has 24,000 employees in 65 countries.


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This day in buyout history: Vista teams with Vivek on pioneering software takeover

For tech startups, the late 1990s were a different time. A more IPO-friendly time.

For one such example, we turn to a software provider that’s now well into adulthood—and one that entered private equity ownership four years ago today.

In our current ecosystem, new companies often stay private for a decade or longer, piling up venture capital funding to support long-term growth. But when Tibco Software got up and running in 1997, only two years passed before the company’s public debut. Led by founder Vivek Ranadivé (today the owner of the NBA’s Sacramento Kings), Tibco began trading on the NASDAQ in July 1999 with an offer price of $15 per share.

The move paid off in an immediate way. After less than six months as a public company, Tibco stock closed the year at $153 per share, representing a stunning tenfold increase in market value for the Palo Alto-based maker of business software.

In retrospect, it was a manifestation of a dot-com bubble stretched nearly to the point of bursting. Unlike many of its peers, though, Tibco survived when the bubble ultimately did pop—but it was some time before the company thrived again. Its stock price languished in the single digits into the 2010s, at which point a steady stream of acquisitions began to drive Tibco’s share value up. By 2012, it was over $30 per share. And once that figure started falling again, the buyout firms began to circle.

Ultimately, it was Vista Equity Partners that made a deal, acquiring Tibco for $24 per share in cash in a takeover worth a total of $4.3 billion that was officially announced December 5, 2014. Ranadivé stepped down from his position as CEO, with fellow longtime executive Murray Rode taking over the top spot.

At the time, such a lofty price was rarefied air for a software company being taken private by a PE firm. But in the months and years that immediately followed Vista’s Tibco takeover, such deals experienced a boom—not on the level of the dot-com boom, but certainly a real change in the way software companies were bought and sold.

In April 2015, Thoma Bravo and the Ontario Teachers’ Pension Plan acquired application performance specialist Riverbed Technology for about $3.5 billion. Informatica, a creator of data integration software, sold four months later to a private equity consortium for some $5.3 billion. During 1Q 2016, IT infrastructure specialist SolarWinds sold to Silver Lake and Thoma Bravo for $4.5 billion and Vista sealed another huge deal in the space, buying Solera, which makes risk and protection software, for $6.5 billion. A few months later, Thoma Bravo bought data manager and analytics business Qlik for $3 billion.

Add those deals to the Tibco acquisition and that’s six of the nine most expensive take-private software deals in the US and Europe since the start of 2010, all occurring in a span of just over 20 months, per the PitchBook Platform.

And now, already, the firms that pumped billions of dollars into those take-private transactions are looking to realize their investments. In October, SolarWinds made a return to the public markets with an IPO, less than three years after going private. And in August, Bloomberg reported that Vista had held discussions about selling Tibco, in part to get out from under a debt load that now nears $3 billion.

The software company’s next move is still uncertain. But if the past two decades are any indication, whatever it is, the deal might prove to be at the forefront of another new trend in the public and private markets.


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Retail mergers and acquisitions rise by 15% as businesses try to combat falling sales

The number of retail sector mergers and acquisitions has grown by 15 per cent in the last year as companies try to make up for struggling sales, a new study reveals.

Figures compiled by law firm RPC show there have been 37 retail mergers and acquisitions (M&A) deals in the year to 31 March, compared with 32 in 2016-17.

RPC said the recently announced Asda and Sainsbury’s merger was a good example of the recent trend for businesses in the food side of the retail sector to “add economies of scale to make up for slowing organic sales growth”.

Firms are also favouring M&A over flotations, due to weak demand from investors. Selling up to a competitor is seen as a more secure way for existing investors to exit a smaller retailer than an IPO which could be cancelled at any point “due to short-term volatility or poor sentiment towards the sector”.

“Through mergers such as Asda and Sainsbury’s, market leaders are looking beyond all the hype about the ‘meltdown of the high street’ and getting on with building breadth of offering and scale,” said RPC corporate partner Karen Hendy.

However, while the number of deals has jumped, the overall value of those transactions has fallen 16 per cent to £3.7bn, from £4.3bn the year before. Ms Hendy said: “It is important that sellers and creditors are sensible over the prices they are expecting from M&A deals in the current climate.”

Meanwhile, RPC said there is still interest in buying distressed retailers’ assets but buyers are looking for substantial discounts, and the number of retailers entering insolvency has risen by 7 per cent in the last year.

UK M&A deals announced in 2017-18 include:

  • The Co-op’s approach for Nisa, valued at £143m

  • Tesco Opticians’ acquisition by Vision Express owner Grandvision

  • Multiyork Furniture’s acquisition by DFS

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Pret a Manger to give employees £1,000 bonus after £1.5bn sale

Pret a Manger has been sold to investment firm JAB, the sandwich seller announced today, and plans to hand out £1,000 to each of its 12,000 workers when the £1.5bn deal completes.

The ubiquitous high street chain is currently majority owned by private equity group Bridgepoint, as well as other minority shareholders. The sale is expected to be completed by the end of this summer.

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