Shares in Japanese drug maker Takeda dropped Friday after a potential rival in its bid to take over Ireland's Shire Pharmaceuticals said it was no longer considering making an offer.
Analysts had raised the prospect of a bidding war between Takeda and Botox-maker Allergan after the global pharma giant said it was also considering making a bid for Shire.
But in a statement late Thursday, Allergan announced it now "does not intend to make an offer for Shire."
Takeda was trading down as much as 3.98 percent on Tokyo trade on Friday morning. Around 0100 GMT it was down 2.04 percent at 4,990 yen.
On Thursday, the Japanese firm said "discussions between the parties regarding a potential offer are ongoing," after Shire rejected a new bid valued at around $60 billion.
Takeda's cash-and-shares offer valued Shire at £42 billion ($60 billion, 48 billion euros) and was pitched at the equivalent of £46.50 per share.
Shire, which is based in Dublin but listed in London, said in a statement that it had rejected three takeover approaches from Takeda because they all "significantly undervalued the company, its growth prospects and pipeline".
But it added that its advisers have entered a dialogue with Takeda to discuss "whether a further, more attractive, proposal may be forthcoming".
The deal would represent Takeda's biggest-ever takeover, according to Japanese media.
Led by Frenchman Christophe Weber, the Japanese firm has been actively looking overseas for acquisitions.
In 2011 it took over Swiss rival Nycomed for 9.6 billion euros (then $13.6 billion).
However, some analysts are concerned that a takeover bid of this magnitude could put too much pressure on Takeda's own finances.