Bankers will earn as much as $648m for advising the two companies and helping finance Takeda’s £46bn cash-and-stock acquisition of the Irish group, according to shareholder documents released on Monday.
Lawyers will take home more than $105m combined, accountants will make about $26m and public relations advisers will earn almost $10m.
The disclosure comes as the two sides race to close the deal by early next year in the face of unrest from a group of Takeda shareholders who are attempting to block the takeover.
The payday ranks as one of the largest in recent years, according to data from Dealogic. However, it does not surpass the $2bn in expenses and fees that were paid when brewer Anheuser-Busch InBev completed a £79bn takeover of SABMiller in 2016.
Takeda said it was due to pay $156.7m in other costs and expenses. One person close to the company said the figure covered matters relating to the future company, such as the listing of new Takeda shares in the US and the winding up of Shire shares that are listed there.
After having a number of offers rebuffed, Takeda agreed to pay £49.01 for each Shire share in May, a 64.4 per cent premium to the price before news of the talks leaked. As it stands, the consideration is made up of 47 per cent in cash and the reminder in new Takeda shares.
On Monday, the Japanese company set December 5 as the date for an extraordinary general meeting to vote on the deal. Approval from two-thirds of shareholders is needed to issue new shares to finance the acquisition.
A group of more than 100 shareholders, including several founding family members of Takeda, have stepped up a campaign to derail the deal. The dissident group, which holds just over 1 per cent of Takeda’s stock, has expressed concerns about the high level of debt the company is taking on.
Takeda has estimated it will have $48bn in net debt after the deal closes, including $13.7bn of Shire’s debt and acquisition debt of $29.8bn. To ease investor concerns, the company recently disclosed that it planned to reduce debt to 2 times earnings before interest, tax, depreciation and amortisation in three to five years, partly through a divestment of up to $10bn of non-core businesses. It also plans to cut costs by at least $1.4bn by the end of the third year after the deal’s completion.
In an open letter sent last month to Christophe Weber, the French chief executive of Takeda, the shareholder group said: “You are plunging headlong into a massive financial commitment that could threaten the very future of the company. The members of our group fear for the future of our beloved Takeda.”
Investors have also been wary of the mounting competitive threat to Shire’s lucrative haemophilia franchise, which accounts for roughly 25 per cent of the Irish drugmaker’s revenues.
For months, Mr Weber has mounted a public relations offensive, working with advisers from Finsbury, the UK firm that is set to make more than $6m in fees, to combat the pressure from the dissident shareholders. He said last week at an industry conference in London that Takeda did not have to do the Shire deal but that it would “accelerate” the company’s progress. FTI Consulting is working with Shire and is set to make $2m-$3m for its public relations work.
About $386m of the almost $650m paid to banks is to cover the costs of financing the deal. Takeda has secured a number of borrowing facilities including a $30.9bn bridge loan led by JPMorgan Chase, Sumitomo Mitsui Banking Corporation and MUFG Bank.
Takeda’s financial advisers and corporate brokers at Nomura, JPMorgan and Evercore are set to make a combined $111.7m, while Shire’s advisers at Goldman Sachs, Citigroup and Morgan Stanley will make $145m-$150m.
Takeda’s lawyers at Linklaters, Nishimura & Asahi and Ogier are expected to make $44m while Slaughter and May, Davis Polk & Wardwell, Nagashima Ohno & Tsunematsu and Mourant Ozannes will make $65m-$70m as legal advisers to Shire.
Takeda plans to close the deal on January 8 and has already clinched approval from key regulators in China, the US and Japan.
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