Three years ago, Christophe Weber caused a stir in Japan when the 237-year-old Japanese pharmaceutical company Takeda Pharmaceutical Co. named him the first overseas boss. Nowadays he is in for his controversial pursuit of the much larger American rival in the Hot Cup Shire Plc.
Takeda said Thursday that he had made a $ 60 billion bid for Shire, which was rejected, but the two companies continue to have discussions. Weber's quest for the mammoth takeover demonstrates the challenge for the future of Japan's largest drug manufacturer. With few late experimental drugs in its pipeline and shrinking home market, Takeda needs lucrative new therapies such as Shire's orphan drugs.
This could make Weber push further, even if there are questions about his ability to make such a big purchase. A group of Japanese lenders, including Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc., have agreed to arrange a 1 trillion yen ($ 9.3 billion) financing for the deal, a person familiar with the matter said ,
The amount of funding could change if Takeda's talks with Shire continue, according to the person who asked not to be identified as the information that is not public. Sumitomo Mitsui did not immediately respond to a request for comment on the financing agreement. A MUFG spokesman declined to comment.
There is a good chance that Takeda will return with another offer, and to increase shareholder value for Shire, she may need to increase the cash portion of her bid, said analyst Fumiyoshi Sakai of Credit Suisse Group. However, Sakai said the funding seems to be in the air and Weber's credibility with investors is at stake.
"If he makes the decision, he has to go through it," Sakai said.
A Takeda spokeswoman declined to comment.
The pressure on Weber is rising. Takeda's chase of a target that is so much bigger than itself has already driven investors down 14 percent after the first announcement. The market value of the Japanese company is $ 36 billion. His bonds also crashed on Friday, fearing that it might pay a high price.
Shire shares fell 4.4% early Friday in London as investors responded to the likelihood of a bidding war following Allergan Plc's decision not to make a competing bid for the company.
Shire rejected Takeda's proposed terms of $ 46.50 ($ 65.50) per share – 62 percent of it – but said it was ready to bargain.
Another potential bidder briefly came to Weber's problems in the form of Allergan Plc. The company said on Thursday morning that it was considering an offer for Shire, but announced that same afternoon that it was not planned to do one. In Japan, Weber is asking a growing number of questions about these plans.
"Shire's rejection of the offer has made it possible for the company to become more expensive," said Naoki Fujiwara, chief fund manager for Shinkin Asset Management Co, which, according to Bloomberg data, holds a position in Takeda. "We need to be aware of the financial risks, things are unclear, and I'm worried."
But Weber, 51, has shown a willingness to criticize and face difficult situations work. When his appointment to the top function was announced for the first time, investors and former employees protested against naming a foreign CEO. A veteran of GlaxoSmithKline Plc, who had been the president of his vaccine department, seemed unimpressed by Weber.
In columns written for the Japanese newspaper Asahi last year, Weber said many people had told him not to take the Takeda job, but he was thrilled with the challenge. "Of course it was risky, but losing the opportunity could cost you more," he wrote.
He also wrote about his father, who died in an avalanche when Weber was 15 years old, and his younger brother, who later became the age of 24. These events shaped his character, he said. After the death of his father he undertook less mountaineering and pursued more education and earned his doctorate.
"Growing up in the mountains was a good education for living in terms of understanding borders and risk management," he wrote  Restructuring
In Japan, the pushback was eased against Weber's appointment as new drugs and extensive restructuring helped to increase profits on its side. He sold non-core businesses. He also forged business and partnerships for early-stage medicines. Last year, he paid approximately $ 4.7 billion to the US cancer drug maker Ariad Pharmaceuticals, Inc. Drugs such as Entyvio's gastrointestinal drug, acquired by Takeda's acquisition of Millennium Pharmaceuticals in 2008, contributed to a leap in profits.
But Takeda still needs a substantial future pipeline for experimental drugs – the lifeblood through which drug makers live and die. Shire would bring new benefits in gastrointestinal and nervous system disorders as well as key treatments in the late stages of the test. A deal would help Weber refill the company's pipeline, albeit with a high price tag.
"I think Shire is a good company, but the financial risk is greater," said Fujiwara, the fund manager.
– With the support of Yuki Hagiwara and John Lauerman