Astrazeneca shares leapt more than 7% today as the City bet that Viagra-maker Pfizer would make a second approach for Britain’s second-biggest drugmaker worth £76 billion.
FTSE 100-listed Astra had discussed a £60 billion merger with US-based Pfizer, the world’s largest drugmaker, several months ago, but hired Goldman Sachs and Morgan Stanley to defend itself from the suitor. Today, however, investors piled into Astra amid expectations Pfizer will return with a £60-a-share approach — far higher than Astra’s £37.80 share price on Friday.
That sent stock in Astra soaring 280.5p to 4062p.
If Pfizer secured a takeover of Astra it would be the biggest-ever foreign acquisition of a British business. Astra accounts for 3% of Britain’s manufacturing exports, so any shift of production overseas would be a concern.
The regulators would also be interested: Astra’s cholesterol-lowering drug Crestor is the main competitor to Pfizer’s Lipitor, once the world’s biggest selling drug.
“This potential approach would be highly opportune; timed right when Astra is in the middle of its transformation,” said Savvas Neophytou at Panmure Gordon. “Given major shareholders will be backing management to execute on its business plan and new strategy, [investors] will require a very high price to accept a bid now.”
