Shire (SHP)

Shire is a leading global biopharmaceutical company that has carved itself a niche in rare diseases. Headquartered in Dublin, Shire has become a lucrative target for major takeover efforts from several international biotech companies, including US-based AbbVie in 2014 and currently Takeda (Japan), which has offered £49/share. Recent share price performance of Shire reflects these M&A efforts, with the stock rising in March and April on news of potential takeover offers. With Takeda’s merger offer still on the table and formally presented to Shire’s Board of Directors, much of the share price action during the summer will be driven by market reactions to the takeover outcome.

Shire has been listed on the LSE since 1996 (Top 20 UK 100 contributor) and its share price has seen positive performance in 14 of the last 22 years (1996-2017, 64% positive rate).

Its best performing May-to-September period was in 2014, when the share price gained 56.7% over the summer months, while its worst performing year was 1998 (-21.3%). With the stock currently trading just off 2018 highs of 4000p, the question for investors is whether a Shire/Takeda deal will push the share price above 4200p highs, or whether it will fall back to pre-offer levels of 3000p?

Source: CMC Markets, Date: 02.05.2018