(Reuters) - Shares in Swiss biopharmaceuticals company Actelion ATLN.S surged more than 8 percent to a record high after Bloomberg reported that talks with French suitor Sanofi (SASY.PA) were nearing an agreement that could be worth about $275 per share.
The potential deal, which could come as soon as next week, would value Actelion at about $29.6 billion, Bloomberg said on Thursday, citing people with knowledge of the matter.
Reuters reported on Wednesday that Actelion was in talks with Sanofi about a deal after U.S. healthcare group Johnson & Johnson (JNJ.N) abandoned efforts to buy the company.
Actelion’s share price was up 8.35 percent at 214 Swiss francs ($208) by 1328 GMT, when Sanofi’s was down 2.42 percent at 74.17 euros, underperforming a 0.6 percent gain in the STOXX Europe 600 Health Care index <0#.SXDP>.
Sources familiar with the situation have said that Sanofi is likely to offer Actelion shareholders cash plus contingent value rights, a type of security that pays out only if experimental drugs reach certain commercial targets, keeping their owners exposed to some risk of failure.
Several investors in Actelion told Reuters they would push for more information.
Sanofi and Actelion declined to comment.
A deal would mark Sanofi’s largest transaction since 2011, when it bought rare disease specialist Genzyme for $20.1 billion.
At the time Sanofi had also proposed cash plus payments tied to the success of the U.S. biotech group’s drugs.
In recent years Genzyme has delivered a double-digit percentage growth in sales thanks to robust demand for its multiple sclerosis treatments.
Actelion makes drugs treating pulmonary arterial hypertension (PAH), a life-threatening form of high blood pressure in arteries connecting the heart and lungs.
It also plans to expand in drugs for multiple sclerosis and clostridium difficile - a condition which can lead to life-threatening inflammation of the colon - but regulatory approvals are still some years away.
However, Actelion has repeatedly maintained that it is better off staying independent and five years ago successfully fended off an attempt by activist hedge fund Elliott Management to put it up for sale.
Meanwhile Sanofi has been attempting to diversify as it faces pressure on prices for its insulin products for treating diabetes in the United States and has repeatedly expressed an interest in making more acquisitions.
Earlier this year it lost out to Pfizer’s (PFE.N) $14 billion bid for cancer drug company Medivation.
Reporting by Ludwig Burger in Frankfurt, Ismail Shakil in Bengaluru, Matthias Blamont in Paris; Editing by Greg Mahlich