28th Apr 2014 05:46
LONDON (Alliance News) - US pharmaceutical giant Pfizer Inc. has renewed its interest in a takeover of UK drugmaker AstraZeneca PLC and approached the target company within the last week, the Financial Times reported Sunday, citing people familiar with the matter.
According to the FT report, Pfizer could make a public declaration of its interest in acquiring AstraZeneca as early as this week, with a bid would be likely to come in at more than USD100 billion. AstraZeneca has a market valuation of about USD87 billion, while Pfizer boasts of a market capitalization of around USD196 billion.
The Financial Times reported that Pfizer first evinced interest in AstraZeneca four months ago, but the overture was rebuffed by AstraZeneca and no formal talks took place. Going public now would reportedly put pressure on AstraZeneca's board to engage in talks with Pfizer.
Pfizer is sitting on a huge cash hoard in its overseas subsidiaries that it can utilize for a major acquisition. Pfizer, the maker of erectile dysfunction drug Viagra, would be heavily taxed if it repatriates the USD70 billion fund to the US.
With both companies facing problems on future growth as they deal with expiration of patents, a merger could be a solution. According to the FT report, AstraZeneca's growing potential in high-value cancer drugs is seen as one of the main attractions for Pfizer.
Last Thursday, AstraZeneca reported a sharp fall in its profit for the first quarter, citing loss on disposal of its Alderley Park site in Cheshire, UK, and the impact of its acquisition of the global diabetes alliance. Revenue for the quarter remained almost flat with last year, while it grew 3% at constant exchange rates.
PFE closed Friday's trading at USD30.75, up USD0.04 or 0.13% on a volume of 18.67 million shares. AZN closed Friday's trading at USD68.66, down USD0.35 or 0.51% on a volume of 1.98 million shares.
Copyright RTT News/dpa-AFX
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