In the drug world, if a company can produce a drug which people believe they need they can make millions of dollars. If they have a good monopoly for a number of years, shareholders like the fact the companies can pay dividends and share prices can move upwards. In the drug industry there has been a number of mergers because sometimes it is less expensive to buy a company with a good pipeline of drugs than do the research and development. Shire PLC has a significant share in the rare drug business and had two companies wanting to buy it Japan’s Takeda and Dublin maker of botox Allergan. According to reporters Greg Roumeliotis, Ben Martin and Ben Hirschler of Reuters Allergan has a little problem with its existing shareholders – the debt the company carries is $30 billion, thanks in part to buying other drug companies.

Takeda according to Shire has not offered enough money or management wants more and Shire is larger than Takeda. The Japanese company is profitable and continues to pay dividends.

Linking to dividend paying stocks, when a takeover comes as a shareholder you have a number of choices – do nothing, accept the offer or sell – hopefully at a higher price but then you need to find an alternative. It is important that you keep a number of companies on your homework list to buy when the time is right for you.

There are more questions than answers, till the next time – to raising questions.