Boston, MA 06/30/2014 (wallstreetpr) – Pfizer Inc. (NYSE:PFE) may have termed its $117 billion acquisition offer for AstraZeneca plc (ADR) (NYSE:AZN) as “final.” However, bank analysts believe that a deal between the two drug companies may not be dead in the water.
According to BNP analysts, a sweetened offer could get AstraZeneca bosses talking with Pfizer about a deal. However, the sweetened offer must be in the neighborhood of 75 billion pounds or $127.7 billion to make economic sense for AstraZeneca. The company rejected earlier bids because the board felt that they undervalued the company and its prospects.
As soon as August
According to the analysts, AstraZeneca can resume deal talks with Pfizer as soon as August if the latter agrees to improve its offer. However, Pfizer will have another opportunity to make advances for AstraZeneca after six months, which is around November.
The analysts believe that shareholders of AstraZeneca can put enough pressure on the company’s board to restart talks with Pfizer Inc. (NYSE:PFE). Shareholders in AstraZeneca hold different views regarding a deal with Pfizer.
Pfizer Inc. (NYSE:PFE) is the maker of bestselling drugs such as Viagra and Lipitor. The company is seeking a deal that will enable it to protect against the impact of generic drugs given that some of its bestselling drugs are set to lose their market exclusivity. Furthermore, the company is also seeking a deal that will allow it to reincorporate outside the U.S. as it pursues corporate tax haven.
The better option
Although Pfizer Inc. (NYSE:PFE) has other acquisition options to pursue towards boosting its revenue and lower taxes, BNP analysts believe that a deal with AstraZeneca is the better option for the New York-based drug company. AstraZeneca has a rich product pipeline especially in cancer treatment space, which makes it an important acquisition for Pfizer.
Pharmaceutical industry is witnessing widespread consolidations as players seek to tie up with promising rivals in efforts to boost revenue amid widespread loss of market exclusivity on bestselling drugs.
