US pharmaceuticals giant Pfizer is eyeing a renewed bid for British drug giant AstraZeneca after its reported £60 billion takeover approach was rejected.
Pfizer, which makes Viagra, is looking to build up its cancer franchise and hopes to cut costs by buying its rival, it has been reported. A deal at around a 25 percent premium to the current share price funded by cash, cheap debt and some stock could boost Pfizer earnings immediately, The Sunday Times reported. Citi analyst Andrew Baum said he believed the report was “very likely genuine” and Pfizer could return to the fray, given the attractiveness of AstraZeneca’s pipeline of cancer drugs, its expertise in autoimmune diseases and the scope for taking out costs.
Baum said: “We anticipate Pfizer to push aggressively ahead with a second approach.” He added that AstraZeneca might seek to structure any deal as a merger of equals as a defence strategy.
Betaville, a British financial blog, on Monday said AstraZeneca had hired Goldman Sachs and Morgan Stanley to act as “defence” advisors in the event Pfizer makes a new effort to acquire the London-based drugmaker. Pfizer has a long track record of making major acquisitions, with the $68 billion purchase of Wyeth in 2009 its last major deal, after earlier acquisitions of Pharmacia and Warner Lambert.
A Pfizer move on AstraZeneca might flush out other bidders. US biotech giant Amgen Inc already has a tie up with AstraZeneca in autoimmune medicines to treat diseases such as psoriasis and severe asthma. Novartis AG and larger GlaxoSmithKline Plc have also been mentioned in the past as potential suitors.
Both firms declined to comment.
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