Takeda Pharmaceutical Co. reached a preliminary agreement to buy Shire Plc with a sweetened takeover offer of about £46 billion ($64 billion), closing in on a bold transaction to gain a foothold in one of the pharma industry’s most coveted niches.

The UK-listed company’s board said it was willing to recommend the latest offer to shareholders on Wednesday, capping a monthlong tug of war in which its Japanese suitor made five successively higher proposals, two of them in the last few days.

Chief Executive Officer Christophe Weber is steering Takeda into its largest-ever transaction to replenish the drugmaker’s pipeline of medicines with promising treatments for rare diseases such as haemophilia — a field that’s lured many pharmaceutical companies lately because they can charge more for unique life-saving drugs than for routine treatments. But the smaller Japanese company’s thirst for the larger Shire fuelled concern among investors and Takeda slumped the most in almost five years in Tokyo trading.

“Some investors hate the acquisition because of the financial risk,” said Naoki Fujiwara, chief fund manager for Shinkin Asset Management Co. “Others like it because it will strengthen Takeda’s engine of growth.” Japanese investors expressed concern about the hefty debt and the possibility Shire shareholders would sell their new Takeda stock, even as the company reiterated its commitment to its investment-grade credit rating.

The transaction could result in a multinotch downgrade on Takeda’s A1 rating, Moody’s Investors Service wrote in a report on Wednesday.

Takeda is offering the equivalent of about £49 a share, including £27.26 in stock and £21.75 in cash, the companies said in separate statements. That’s a 60 per cent premium to Shire’s closing price on March 27, before Takeda disclosed its takeover interest.

The companies also received an extension from UK regulators until May 8 for Takeda to make a firm offer. Shire shares rose less than 1 per cent in London trading, valuing the company at £36 billion.

Weber is seeking growth outside Japan amid patent expirations and a shrinking domestic population. A completed deal would be the biggest by a Japanese company of an overseas target, and create one of the world’s largest pharmaceutical companies. With few late-stage experimental drugs in its own pipeline and a shrinking home market, Takeda needs lucrative new therapies.

Shire shareholders would own half of the enlarged company under the latest Takeda proposal.

“The deal seems to be much more of a merger,” Ronny Gal, an analyst with Sanford C. Bernstein & Co. in New York, wrote in a note to clients.

The takeover is likely to go through, according to Gal. Allergan Plc, another potential bidder, withdrew last week.

“If there is another bidder for Shire, they will reasonably emerge in the next two weeks,” Gal said. “We think such bidder is unlikely, as we expect Shire bankers to have left no stone unturned.”