AstraZeneca shares gain on talk of sweetened Pfizer bid

Thu May 8, 2014 6:59am EDT
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By Sudip Kar-Gupta and Ben Hirschler

LONDON (Reuters) - AstraZeneca (AZN.L: Quote) shares gained 2 percent on Thursday on speculation that U.S. drugmaker Pfizer (PFE.N: Quote) was about to return with a higher bid worth more than 53 pounds ($89.9) a share, traders said.

A bid at that level would value Britain's second-biggest pharmaceuticals group at around $113 billion.

Pfizer's pursuit of AstraZeneca in potentially the biggest ever foreign takeover of a British firm has provoked a political storm, with Prime Minister David Cameron demanding Pfizer give stronger guarantees it will keep jobs and investment in the country.

Pfizer's previous approach, which was promptly rejected by the AstraZeneca board, initially valued the group at $106 billion - but the value of that cash-and-stock offer has since slipped because of a fall in Pfizer shares following weak quarterly results.

A stock market report in the Daily Mail newspaper said many investors believed Pfizer was working with its advisers on a "knockout offer" of more than 53 pounds per share that would be made by the weekend.

"The deal is not there, but it's not off the table either," Dafydd Davies, senior trader at London-based Prime Wealth Group, said.

Pfizer Chief Executive Ian Read is heading to London next week to lay out his case for a merger in front of two parliamentary committees on May 13 and 14.

A Pfizer spokesman had no comment on the company's bid plans.   Continued...

The Pfizer logo is seen at their world headquarters in New York April 28, 2014. REUTERS/Andrew Kelly