Japan's Takeda Pharmaceutical Co. made a $60 billion (GBP42.3 billion) takeover offer for Shire PLC earlier this week, but Shire rejected the offer, stating that Takeda significantly undervalued the company when considering its development of profitable rare-drug medication. This was Takeda's third offer, which valued Shire at GBP 46.50 a share. The offer represents a premium of more than 50%.

Takeda made the bid to Shire in the hopes of strengthening its drug development portfolio and broadening its international footprint. Takeda is best known for Dexilant, a heartburn treatment. The drug maker has made several large acquisitions under the current CEO Christophe Weber, but the takeover of Shire would be the largest. If Shire agrees to the deal, they would have sales of more than $30 billion a year.

Shire is best-known for Adderall, an ADHD drug, but has recently been developing drugs for rare diseases. It has agreed to sell its cancer business to Servier for $2.4 billion as part of its efforts to divest nonstrategic assets.

Takeda's offer prompted interest from another drug maker, Allergan. A few hours after Takeda's bid, Allergan confirmed that it was "in the early stages of considering a possible offer" for Shire, which could have resulted in a potential bidding war. Allergan's stock price went down more than 8% as a result. However, CNBC reported that Allergan would not be making an official bid for Shire and Allergan's share price responded positively. Around 2 p.m., representatives from Allergan confirmed this. Still, Allergan continues to evaluate potential strategies that will create more value for its shareholders, such as divestitures, combinations and acquisitions, according to a statement issued by Allergan. And while Allergan is not bidding for Shire at this time, a potential deal between Shire and Takeda is still on the table.