November 12
We are surprised at this sudden decision, which comes even before approval has been received from the European Commission. Only three weeks are left for the opposition campaign run by the group Thinking about Takeda's Bright Future. This is not enough time to allow the Group to exercise its right to present a shareholder proposal. Management's precipitous action, without regard for appearances, make it seem as though the merger with Shire is their sole purpose. We think they are certainly in violation of the spirit of the Corporate Governance Code.
In this circular, Takeda has made its first public statement of how it thinks the merger will affect reported earnings per share (EPS):
The company previously said U.K. rules prevented it from making such statements, but this circular makes it appear such explanations were untrue. In the past, Takeda said the merger would boost EPS in the first fiscal year. We now believe it felt compelled to issue the new guidance to fend off possible litigation should earnings decline in 2019 and 2020.
In addition, to win the approval of the European Commission, Takeda has decided to sell its rights to the inflammatory bowel disease medication SHP647. As a result, the proposed merger will bring no synergies in the area of the digestive system, which were previously regarded as important. The circular does not mention this point. The circular to the extraordinary general meeting of shareholders includes a major change in the company's projection of the impact of the merger on earnings, and neglects to mention a potential negative factor.