Round two: Pfizer set to launch a second attempt to buy AstraZeneca despite reporting a fall in profits
Pfizer is likely to launch a second attempt to buy AstraZeneca despite reporting a poor set of financial figures.
Profits at the US drugs giant fell by 25 per cent in the first half of the year, and it was unable to announce any new blockbuster drugs.
The Viagra maker is desperate to buy the British pharmaceutical group in a bid to slash its international tax bill and give it access to cutting-edge research.
Slump: Profits at the US drugs giant fell by 25 per cent in the first half of the year, and it was unable to announce any new blockbuster drugs
But after its £69billion offer was rebuffed earlier this summer, the company has to wait until November before it can make another unsolicited approach.
AstraZeneca, which reports its half year results this week, has come under pressure from its shareholders to re-enter talks once its own three month cooling-off period ends in August.
At that point, it can approach Pfizer.
Yesterday Pfizer boss Ian Read said the company ‘continues to look at’ a number of takeover targets, but refused to talk specifically about his British rival.
But analysts have said Astra (down 38.5p to 4322.5p) is likely to fall prey to the US predator.
‘AstraZeneca remains the most attractive M&A target for Pfizer despite the initial rebuff in our view,’ said Citi analyst Andrew Baum yesterday.
He expects Pfizer to return for the company before the end of the year, and said the US group would need to offer in excess of £60 a share to be successful.
Its previous bid was for £55 a share, which Astra rejected as insubstantial. ‘I definitely think Pfizer will come back for Astra at a somewhat higher bid,’ said analyst Ori Hershkovitz at the Tel Aviv-based Sphera Fund.
‘Pfizer is in a very desperate spot, having seen most of its pipeline disappoint and facing multiple patent expirations. It needs growth; it needs to buy a pipeline.’
Pfizer’s need to buy a more successful rival were underlined by its results.
The group’s half year profits fell 25 per cent to £4billion on sales that slipped 5 per cent to £14billion.
Pfizer is also keen to buy Astra before the window for so-called tax inversions – where a company shifts its global tax base by buying a smaller rival – closes.
Analysts reckon the US will outlaw the practice, which has been criticised, within 18 months.
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