Shire announces revised proposal and extension of PUSU deadline to 8 May 2018

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE “CODE”). THERE CAN BE NO CERTAINTY THAT ANY FIRM OFFER WILL BE MADE

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

Shire plc (“Shire” or the “Company”)

24 April 2018

Shire announces revised proposal and extension of PUSU deadline to 8 May 2018

The Board of Shire (the “Board”) announced earlier today that it had received a further revised proposal from Takeda Pharmaceutical Company Limited (“Takeda”) regarding a possible offer for the Company.

The revised proposal comprises 0.839 new Takeda shares and US$30.33 in cash for each Shire ordinary share (the “Revised Proposal”).

Based on Takeda’s share price of ¥4,923 and the exchange rates of £:¥: of 1:151.51 and £:US$ of 1:1.3945 as at the close of business on 23 April 2018, the Revised Proposal implies an equivalent value of approximately £49 per Shire ordinary share comprising the equivalent of:

• £27.26 in new Takeda shares; and
• £21.75 in cash.

On this basis the Revised Proposal is equivalent to a value of approximately £46 billion for the entire issued and to be issued share capital of the Company. Shire shareholders would also be entitled to any dividends announced, declared, made or paid by Shire in the ordinary course prior to completion of the possible transaction.

At completion, Shire shareholders would own approximately 50 per cent. of the enlarged Takeda and the new Takeda shares will be listed in Japan and in the US through an ADR program.

The Board has indicated to Takeda that it would be willing to recommend the Revised Proposal to Shire shareholders subject to satisfactory resolution of the other terms of the possible offer, including completion of reciprocal due diligence by Shire on Takeda. Accordingly, the Board will engage in discussions with Takeda in relation to these terms.

The making of any firm offer by Takeda would be subject to the following matters:

• agreement of certain other terms of the Revised Proposal;
• satisfactory completion of a confirmatory due diligence review by Takeda;
• the unanimous and unconditional recommendation of the Board of Shire; and
• final approval by the Board of Takeda.

Takeda reserves the right to waive in whole or in part any of the pre-conditions to making a firm offer set out in this announcement.

With the consent of the Panel on Takeovers and Mergers (the “Takeover Panel”), the Board has agreed to an extension of the relevant deadline under Rule 2.6(c) of the Code until 5.00 p.m. (London time) on 8 May 2018 to enable the parties to conclude their ongoing discussions. This deadline may be extended further with the consent of the Takeover Panel, at Shire’s request, in accordance with Rule 2.6(c) of the Code.

Takeda reserves the following rights in respect of the Revised Proposal:

• to make an offer for Shire at any time on less favourable terms or to vary the mix of consideration:
• with the agreement or recommendation of the Board of Shire;
• if a third party announces a firm intention to make an offer for Shire which, at the date Takeda announces a firm intention to make an offer for Shire, is valued at a lower price than contemplated by the terms of the Revised Proposal; or
• following the announcement by Shire of a whitewash transaction pursuant to the Code; and
• in the event that any dividend and/or other form of capital return or distribution is announced, declared, made or paid by Shire otherwise than in the ordinary course, to reduce any offer by the amount of such dividend and/or other form of capital return or distribution.

There can be no certainty that any firm offer for the Company will be made.

This announcement is made with the consent of Takeda.

Enquiries

Person responsible

Stephen Williams, Deputy Company Secretary, is responsible for arranging the release of this announcement on behalf of the Company.

Publication on a website

In accordance with Rule 26.1 of the Code, a copy of this announcement will be made available, subject to certain restrictions relating to persons resident in restricted jurisdictions, on Shire's website at www.shire.com by no later than noon (London time) on the business day following this announcement. The content of this website is not incorporated into and does not form part of this announcement.

Further information

This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise.

The distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

Citigroup Global Markets Limited, which is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Shire and no one else in connection with the matters described in this announcement and shall not be responsible to anyone other than Shire for providing the protections afforded to clients of Citigroup Global Markets Limited, or for giving advice in connection with the matters described in this announcement or any matter referred to therein.

Goldman Sachs International, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Shire and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Shire for providing the protections afforded to clients of Goldman Sachs International, or for giving advice in connection with the matters described in this announcement or any matter referred to herein.

Morgan Stanley & Co. International plc, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting for Shire and no one else in connection with the matters described in this announcement and will not be responsible to anyone other than Shire for providing the protections afforded to clients of Morgan Stanley & Co. International plc, or for giving advice in connection with the matters described in this announcement or any matter referred to herein.

Disclosure requirements of the Code

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

About Shire

Shire is the global leader in serving patients with rare diseases. We strive to develop best-in-class therapies across a core of rare disease areas including hematology, immunology, genetic diseases, neuroscience, and internal medicine with growing therapeutic areas in ophthalmics and oncology. Our diversified capabilities enable us to reach patients in more than 100 countries who are struggling to live their lives to the fullest.

We feel a strong sense of urgency to address unmet medical needs and work tirelessly to improve people's lives with medicines that have a meaningful impact on patients and all who support them on their journey.

www.shire.com

Forward-Looking Statements

Statements included herein that are not historical facts, including without limitation statements concerning future strategy, plans, objectives, expectations and intentions, projected revenues, the anticipated timing of clinical trials and approvals for, and the commercial potential of, inline or pipeline products, are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Shire's results could be materially adversely affected. The risks and uncertainties include, but are not limited to, the following:

• Shire's products may not be a commercial success;
• increased pricing pressures and limits on patient access as a result of governmental regulations and market developments may affect Shire's future revenues, financial condition and results of operations;
• Shire depends on third parties to supply certain inputs and services critical to its operations including certain inputs, services and ingredients critical to its manufacturing processes. Any disruption to the supply chain for any of Shire's products may result in Shire being unable to continue marketing or developing a product or may result in Shire being unable to do so on a commercially viable basis for some period of time;
• the manufacture of Shire's products is subject to extensive oversight by various regulatory agencies. Regulatory approvals or interventions associated with changes to manufacturing sites, ingredients or manufacturing processes could lead to, among other things, significant delays, an increase in operating costs, lost product sales, an interruption of research activities or the delay of new product launches;
• the nature of producing plasma-based therapies may prevent Shire from timely responding to market forces and effectively managing its production capacity;
• Shire has a portfolio of products in various stages of research and development. The successful development of these products is highly uncertain and requires significant expenditures and time, and there is no guarantee that these products will receive regulatory approval;
• the actions of certain customers could affect Shire's ability to sell or market products profitably. Fluctuations in buying or distribution patterns by such customers can adversely affect Shire's revenues, financial conditions or results of operations;
• failure to comply with laws and regulations governing the sales and marketing of its products could materially impact Shire's revenues and profitability;
• Shire's products and product candidates face substantial competition in the product markets in which it operates, including competition from generics;
• Shire's patented products are subject to significant competition from generics;
• adverse outcomes in legal matters, tax audits and other disputes, including Shire's ability to enforce and defend patents and other intellectual property rights required for its business, could have a material adverse effect on the Shire's revenues, financial condition or results of operations;
• Shire may fail to obtain, maintain, enforce or defend the intellectual property rights required to conduct its business;
• Shire faces intense competition for highly qualified personnel from other companies and organizations;
• failure to successfully execute or attain strategic objectives from Shire's acquisitions and growth strategy may adversely affect the Shire's financial condition and results of operations;
• Shire's growth strategy depends in part upon its ability to expand its product portfolio through external collaborations, which, if unsuccessful, may adversely affect the development and sale of its products;
• a slowdown of global economic growth, or economic instability of countries in which Shire does business, could have negative consequences for Shire's business and increase the risk of non-payment by Shire's customers;
• changes in foreign currency exchange rates and interest rates could have a material adverse effect on Shire's operating results and liquidity;
• Shire is subject to evolving and complex tax laws, which may result in additional liabilities that may adversely affect the Shire's financial condition or results of operations;
• if a marketed product fails to work effectively or causes adverse side effects, this could result in damage to Shire's reputation, the withdrawal of the product and legal action against Shire;
• Shire is dependent on information technology and its systems and infrastructure face certain risks, including from service disruptions, the loss of sensitive or confidential information, cyber-attacks and other security breaches or data leakages that could have a material adverse effect on Shire's revenues, financial condition or results of operations;
• Shire faces risks relating to the expected exit of the United Kingdom from the European Union;
• Shire incurred substantial additional indebtedness to finance the Baxalta acquisition, which has increased its borrowing costs and may decrease its business flexibility;
• Shire's ongoing strategic review of its Neuroscience franchise may distract management and employees and may not lead to improved operating performance or financial results; there can be no guarantee that, once completed, Shire's strategic review will result in any additional strategic changes beyond those that have already been announced;
• the potential uncertainty resulting from the announcement by Takeda Pharmaceutical Company Limited that it is considering making a possible offer for Shire; and

a further list and description of risks, uncertainties and other matters can be found in Shire's most recent Annual Report on Form 10-K and in Shire's subsequent Quarterly Reports on Form 10-Q, in each case including those risks outlined in "ITEM1A: Risk Factors", and in Shire's subsequent reports on Form 8-K and other Securities and Exchange Commission filings, all of which are available on Shire's website.

All forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by this cautionary statement. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. Except to the extent otherwise required by applicable law, we do not undertake any obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise.

Appendix

SOURCES AND BASES

The relevant sources of information and bases of calculation are provided below in the order in which such information appears in this document. Where such information is repeated in this document, the underlying sources and bases are not repeated.

1. A value of approximately £46 billion for the entire issued and to be issued share capital of the Company is based on:
1. An equivalent offer price of approximately £49 per share
2. Shire’s entire issued and to be issued share capital of 938,653,483, consisting of 913,463,775 ordinary shares in issue (as disclosed pursuant to Rule 2.9 in Shire’s announcement dated 24 April 2018, excluding 7,357,283 ordinary shares held in treasury) plus 25,189,708 ordinary shares which may be issued on or after the date of this announcement to satisfy the vesting of awards and the exercise of options
2. The exchange rates of £:¥ of 1:151.51 and £:US$ of 1:1.3945 have been derived from Bloomberg as at 4.00 p.m. (London time) on 23 April 2018.
3. Takeda’s entire issued share capital of 794,530,364 ordinary shares (excluding treasury shares) as at 23 April 2018, consisting of 781,110,388 ordinary shares with voting rights attached, and 13,419,976 ordinary shares in respect of which the voting rights attaching to such shares are not exercisable or which do not carry voting rights.