Pharmaceutical giant Shire has rejected a mammoth £44 billion takeover bid from Japanese rival Takeda, but talks between the pair are ongoing.
Takeda, which signalled its interest in Shire last month, put forward a £46.50 a share offer for the firm, comprised of £17.75 in cash and £28.75 of new Takeda shares.
However, the Japanese firm said: "Takeda was subsequently notified that the board of Shire had rejected its proposal.
"Discussions between the parties regarding a potential offer are ongoing."
Takeda said that it will remain "disciplined" with respect to the terms of another offer, which would only be made with the backing of Shire's board and after satisfactory due diligence.
Shares in Shire rose 4% after the announcement
The firm reiterated that the acquisition of Shire would "accelerate its transformation and result in a global, value-based, R&D-driven biopharmaceutical leader", to be headquartered in Japan.
In addition, a tie-up would help realise the Japanese company's R&D strategy, drive financial value and allow it to exploit further opportunities in the US.
Takeda first revealed last month that it was considering making a takeover approach.
Shire said in a statement that it has received three offers from Takeda, which were unanimously rejected by the board as they "significantly undervalued the company, its growth prospects and pipeline".
The latest disclosure comes days after Shire agreed to sell its oncology business to French firm Servier for 2.4 billion US dollars (£1.68 billion).
The drug-maker's board has given the green light to the deal, which does not require shareholder approval and is now expected to close in the second or third quarter of 2018.
Takeda, which was founded in 1781 and employs 30,000 people, has a strong presence in emerging markets and operates in more than 70 countries.
If a deal were to be struck, it would see the hunter become the hunted after Shire itself went on the acquisition trail only two years ago when it bought Baxalta for 32 billion US dollars (£22.6 billion).