AstraZeneca share price leaps after reports of Pfizer approach

on Apr 22, 2014
Updated: Apr 9, 2020
Listen, Tuesday, April 22: Pfizer Inc (NYSE:PFE), the world’s largest drugmaker, has approached AstraZeneca Plc (LON:AZN, NYSE:AZN) about a possible takeover, The Sunday Times has reported.

The London Stock Exchange was closed yesterday for Easter, but AstraZeneca’s share price jumped more than nine percent in New York where the company’s shares are traded as American Depository Receipts. Pfizer’s shares climbed about two percent.
**Pfizer said to be weighing bid for AstraZeneca**
The Sunday Times quoted unnamed investment bankers and industry sources as saying that informal conversations about a possible tie-up between AstraZeneca and Pfizer had taken place in recent weeks. The Anglo-Swedish drugmaker is reportedly resisting Pfizer’s advances with no talks currently being underway. New York-based Pfizer however could come back with a fresh approach. Unnamed sources cited by the Betaville financial blog have placed Pfizer’s offer at about £50 per share for AstraZeneca, which would value the FTSE 100 company at about £63 billion.

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The Telegraph yesterday reported, without quoting any sources, Goldman Sachs and Morgan Stanley had been drafted in as defence advisers in case the US pharma giant launches a fresh takeover bid. Citigroup analyst Andrew Baum told the Financial Times that he expected the US company “to push aggressively ahead with a second approach, and added that an acquisition of AstraZeneca would transform Pfizer’s “competitive presence along the critical axis of immuno-oncology [and] autoimmune disease”.

Pfizer, which has a history of big acquisitions, is seeking to build up its cancer franchise, while AstraZeneca has in recent months signed several research and development deals in the oncology field. Last week, Pfizer and AstraZeneca announced a collaboration with Cancer Research for a new lung cancer treatment.

Other analysts however are more sceptical. The Telegraph quoted broker Sandford Bernstein as saying that a tie-up was “hard to believe” as such a large deal would mark a “sudden reversal” of the stated strategy of Ian Read, Pfizer’s chief executive.
**AstraZeneca earnings preview**
Investors will be expecting more details of any talks with Pfizer on Thursday when AstraZeneca is scheduled to publish its first-quarter results. UBS analysts forecast a core operating profit of $2.01 billion (£1.2 billion) and basic core earnings per share (EPS) of $1.18. Analysts at JP Morgan expect the Anglo-Swedish company to report sales of $6.4 billion.

In February, AstraZeneca posted a six percent drop in full-year revenue to $25.7 billion on account of patent losses on several key products. Core EPS came in at $5.05 for the full year, representing a 23 percent decline on a constant-exchange-rate basis. (AstraZeneca share price: patent losses continue to erode profits)
**On April 17, buy AstraZeneca shares at 3,789.50p.**
**On April 17, sell AstraZeneca shares at 3,788.00p.**


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