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Business Deals

Opponents to Takeda-Shire merger claim 20% support

But campaign to block deal still expected to fall short

Kazuhisa Takeda, right, former director of Takeda Pharmaceutical, speaks at a news conference in Tokyo on Dec. 3. (Photo by Akihide Anzai)

TOKYO -- A former Takeda Pharmaceutical director has claimed investors holding some 20% of the Japanese drugmaker planned to vote against its merger with Ireland's Shire at Wednesday's extraordinary shareholders' meeting.

However Kazuhisa Takeda, a former director and a member of the founding family, conceded this was not likely to be enough to stop the deal, as votes accounting for one-third of Takeda's equity were required.

Takeda was speaking for a group of shareholders and former employees opposed to the merger. His admission will be a blow to efforts by the Takeda family to halt the deal. Last week Kunio Takeda, a former chairman who presided over a doubling of sales during 16 years to 2009, made his own objections public.

Kazuhisa Takeda said the group of former employees would continue to fight to stop the deal, despite the shortfall in support so far.

"We are definitely against [it].... [The] financial risk is too big, while [the] expected merit is quite limited," said Takeda at a news conference in Tokyo. "M&A is quite necessary for Takeda's future, but this deal is too risky," he said, adding that Takeda has the ability to grow through its own research and development without doing big deals.

The former director said around 20% to 25% shareholders might object to the merger at the meeting on Wednesday, but he admitted even that that could be "optimistic."

Shigeru Mishima, an adviser to the merger opponents, said about 10% of the shareholders supported the move to block the deal at a general shareholders meeting in July. Their efforts to bring others on board may have raised this number, he said.

In addition, members of the Takeda family, including former Chairman Kunio Takeda, which together hold around 10% of the company, will oppose the merger, Mishima said.

Mishima also said that he was surprised by Shire's growth over the past two years, but added that Shire's major product for hemophilia would face a big challenge as new products from competitors will launch.

Kazuhisa Takeda acknowledged that the chances of blocking the deal had been slim. "It was a very difficult challenge from beginning. But it is a historical issue for the Japanese economy. We are responsible for explaining our position to society."

At the Dec. 5 meeting, Takeda's plan to issue new shares as part of the $62 billion acquisition will be put to a vote. If more than two-thirds vote in favor, Takeda can begin the acquisition process since the deal already received approval from antitrust authorities in China, Japan and the U.S. Takeda said on Nov. 21 that the European Union has also given the green light.

Institutional investors represent the majority of Takeda's shareholders at roughly 66%, with 31% from Japan and the other 35% from overseas. Proxy advisory companies Institutional Shareholder Services and Glass, Lewis & Co. have backed the Shire buy.

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