Our Organization and Activities

The group known as “Thinking about Takeda’s Bright Future” (hereafter referred to as TTBF) consists of about 130 former associates of Takeda and other private shareholders. Our aim is to support the sustainable and strong growth of Takeda Pharmaceutical Company Ltd. from our viewpoint as long-term shareholders.

The total number of shares controlled by our group is not static, but TTBF clearly retains a level of ownership which qualifies the group as eligible for exercising the Shareholders’ Proposal Right under the Corporation Law, Article 303, Item 2. The law defines this level as ownership of at least 1% of the total shares in issue, or control of more than 300 votes. In fact, it should be noted that the Shareholders’ Proposal Right was exercised by a previous group of volunteers in favor of voting against the position at Takeda of “Corporate Counselor” last year.

Now that the possibility of a merger between Takeda and Shire is debated, we, the members of TTBF, want to be vocal in our opposition to the proposed transaction. Our concerns are outlined below, and these have been submitted in the form of a position paper to Mr. Christopher Weber, the CEO of Takeda.

1.   The risks to the healthy management of the company

The buy-out of Shire will require the purchase price of Y7,000 bn., an amount unprecedented in the history of the Japanese financial market. The enormous purchase price in itself constitutes an enormous risk to the sustainable financial position of Takeda Pharmaceutical.

2.   New loans of about Y3,000 bn. will be required to meet the proposed cash payment to the shareholders of Shire. 

The total debt of the new merged entity would soar to Y6,000 bn. from the current Y1,100 bn. debt owed by Takeda and the outstanding debt of Shire of Y1,700 bn. We estimate that the annual interest charges on this new level of debt would exceed Y150 bn. This debt level clearly suggests a serious risk to the long- term sustainability of the company.

3.   Damages to existing Takeda shareholders

In addition to new borrowing, the remaining 55% of the acquisition price is to be financed by the issuance of new shares in Takeda. Such a substantial dilution of existing shareholders, both in terms of EPS and of voting rights, is clearly disadvantageous to the current shareholders of Takeda.

4.   Negative Impact on Stock Price and Credit Rating

Takeda’s share price has seen a drop of about 20% since the public release of the terms of the proposed merger with Shire. Credit rating agencies, including Moody’s and S&P have suggested probable credit downgrades. 

5.   Current Situation of Shire

Shire’s reported attractions as a merger candidate include the strength in its products for treatment of hemophilia and rare diseases, and for these reasons, it is suggested as a strong partner in terms of reinforcing Takeda’s product pipeline. However, while meeting the need for treatments of hemophilia and rare diseases is of course important from the point of view of the public good, these markets are limited and will therefore not offer Takeda opportunities for significant and sustained growth.

6.   Acquiring a new product pipeline

There is an important difference between an M&A approach to acquiring small or medium size bio-pharmaceutical companies and managing the company safely with an aim of long-term sustainable growth. Simply focusing on the enlargement of the business size is no guarantee of healthy sustainable growth of the firm.

Unfortunately, the management of Takeda has taken a universal decision to proceed with the merger with Shire, irrespective of these serious and rational concerns of the shareholders.

Given these circumstances, TTBF is determined to take the following actions:

• 1. Ahead of the annual general meeting of Takeda shareholders, scheduled for the end of June, TTBFT will publicly disclose its concerns and its rationale to oppose this transaction to the media, to institutional investors, to private shareholders, and others. We aim to seek support for our views from these groups.

  2. At the annual general meeting of shareholders, TTBF will exercise our legal right to make a proposal and to obtain support for our opposition.

  3. TTBF will also act to obtain a negative resolution at the Extraordinary Shareholders’ meeting which will be convened in the future to vote on the Shire acquisition.

  4. If, at the Extraordinary Shareholders meeting, the vote is in favor of proceeding with the Shire transaction, our group will consider a shareholders’ derivative lawsuit, to investigate whether the Board of Directors has properly fulfilled its duties to the shareholders, and to determine if damage has thereby been done to the company.

Please see below an original, formal version of the statement