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    4519   JP3519400000

CHUGAI PHARMACEUTICAL CO., LTD

(4519)
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Delayed Japan Exchange  -  01:00 2022-12-02 am EST
3570.00 JPY   -2.35%
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Shares in Japan's Chugai surge on report of Roche buyout offer

08/18/2014 | 05:43am EST

TOKYO (Reuters) - Shares in Japan's Chugai Pharmaceutical Co Ltd (>> CHUGAI PHARMACEUTICAL CO., LTD.) jumped 15 percent on Monday on a media report that its 60-percent shareholder, Roche Holding AG (>> Roche Holding Ltd.), was in talks to buy the rest of the company for about $10 billion (6 billion pounds).

TOKYO (Reuters) - Shares in Japan's Chugai Pharmaceutical Co Ltd (>> CHUGAI PHARMACEUTICAL CO., LTD.) jumped 15 percent on Monday on a media report that its 60-percent shareholder, Roche Holding AG (>> Roche Holding Ltd.), was in talks to buy the rest of the company for about $10 billion (6 billion pounds).

Chugai denied over the weekend that it was in talks with Roche over a buyout but investors dismissed the statement, sending the shares limit-up in early trade, to a record 4,015 yen, before closing up 15.4 percent at 3,825 yen.

"The market appears to believe the report but since it's not 100 percent certain, some took profit to send the shares off their high," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management.

A source with direct knowledge of the matter said on Monday that Roche was not considering such a deal, citing price and saying both companies were happy with the current arrangement.

The reported $10 billion price tag would represent a premium of about 41 percent over Chugai's closing price on Friday.

European brokerage Kepler Cheuvreux said a $10 billion buyout of Chugai would be too expensive and "would hardly be exciting from a strategic perspective".

"We would be surprised if Roche was launching a hostile bid without trying to approach the Chugai board and attempting to find an amenable price for all," it said in a research note.

Bloomberg said the Swiss group could announce a deal to take full control of its Japanese partner for oncology and arthritis drugs as early as this week. A spokeswoman for Roche declined to comment on the report.

The source told Reuters that even at Friday's closing share price of 3,315 yen, which would value the remaining stake in Chugai at about 720 billion yen ($7 billion), an acquisition would be too expensive. The source declined to be identified because he was not authorised to speak to the media.

Speculation that Roche, the world's largest producer of cancer medicines, might swallow Chugai had swirled after Roche made a similar buyout of U.S. biotech group Genentech in 2009. But Roche and Chugai have made repeated denials.

Chugai's valuations - whether measured by price-to-earnings, price-to-book or price-to-cash flow - already exceed the median valuations of its Japanese peers, Thomson Reuters data shows.

Barclays said in a report that a $10 billion acquisition would be difficult to justify. Roche would retain an additional 200 million Swiss francs ($220 million) a year in shareholder payments, the investment bank said.

Analysts also said Roche may be looking to profit further from Chugai's drugs line-up and pipeline, including Actemra for rheumatism and ACE910 for haemophilia.

(Additional reporting by Chris Gallagher; Editing by Edmund Klamann and Mark Bendeich)

By Emi Emoto and Chang-Ran Kim

Stocks treated in this article : CHUGAI PHARMACEUTICAL CO., LTD., Roche Holding Ltd.

ę Reuters 2014
Stocks mentioned in the article
ChangeLast1st jan.
CHUGAI PHARMACEUTICAL CO., LTD -2.35% 3570 Delayed Quote.-4.42%
ROCHE HOLDING AG -0.56% 308.25 Delayed Quote.-18.69%
US DOLLAR / JAPANESE YEN (USD/JPY) 0.09% 134.412 Delayed Quote.17.45%
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Financials
Sales 2022 1 196 B 8 837 M 8 837 M
Net income 2022 356 B 2 628 M 2 628 M
Net cash 2022 531 B 3 927 M 3 927 M
P/E ratio 2022 16,5x
Yield 2022 2,22%
Capitalization 5 873 B 43 395 M 43 395 M
EV / Sales 2022 4,47x
EV / Sales 2023 4,96x
Nbr of Employees 7 664
Free-Float 38,0%
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Mean consensus OUTPERFORM
Number of Analysts 13
Last Close Price 3 570,00 JPY
Average target price 4 416,15 JPY
Spread / Average Target 23,7%
EPS Revisions
Managers and Directors
Tatsuro Kosaka Manager-Pharmaceutical Business Strategy Office
Osamu Okuda Manager-Life Cycle Management II
Itagaki Toshiaki CFO, Manager-Information Technology & Accounting
Hisafumi Okabe Senior Executive Officer & Head-Research
Junichi Nezu Executive Officer, GM-Research & Development
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