Investors need to pay close attention to AZN stock based on the movements in the options market lately.
The logic of a pharma megamerger is questionable, but AstraZeneca's record isn't.
Citi has told clients that a large chunk of deal risk is already in AstraZeneca PLC's (LSE:AZN, NASDAQ:AZN) share price after Monday's sharp fall, while Deutsche Bank sees clear parallels with the drugmaker's Alexion acquisition five years ago. The two notes are the second-day response to a Financial Times report over the weekend that the FTSE 100 drugmaker is in discussions over a merger with US rival Bristol Myers Squibb.
Even if a megamerger fails to materialize, investors stand to benefit from a wave of M&A activity in the biopharma sector.
Holz framed the logic bluntly. “If you take these two companies and you slash expenses, that would be the main thing here.
Bristol-Myers Squibb (BMY) stock is declining this morning, reversing its premarket gains as Wall Street digests bombshell reports of a potential transatlantic merger with AstraZeneca (AZN). According to media reports, the UK healthcare heavyweight has held preliminary discussions with BMY regarding a potential megamerger that could value the combined enterprise near $400 billion.
Bristol Myers Squibb stock is surging Monday following a report of a potential mega-merger with a competitor.
AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) shares fell 6% to 11,872p on Monday, the steepest decline in the FTSE 100, as analysts struggled to explain why Britain's largest drugmaker would want to buy Bristol-Myers Squibb Co (NYSE:BMY, XETRA:RM, OTC:BMYMP). Jefferies described the reported talks as more than a 'head scratcher'.
AstraZeneca shares were slumping while Bristol-Myers Squibb was jumping on Monday on reported deal talks. But the big question is why these two pharmaceutical giants would want to come together in the first place.
The merger would be one of the biggest pharma deals ever. AstraZeneca's market capitalization stood at $264 billion as of Friday's close, while Bristol Myers Squibb had a total valuation of $133 billion.
AstraZeneca shares fell more than 6% in early trading on Monday after reports emerged that the British pharmaceutical giant had held preliminary discussions with US-based Bristol Myers Squibb over a potential merger, a move that could create one of the world's largest drugmakers. A person familiar with the matter told Reuters that the companies had explored a possible combination, confirming an earlier report by the Financial Times.
Shares in AstraZeneca PLC (LSE:AZN, NASDAQ:AZN) fell 7% to 11,723p on Monday after news that Britain's biggest drugmaker is in talks to buy its US rival, Bristol-Myers Squibb Co (NYSE:BMY, XETRA:RM, OTC:BMYMP). A deal would create a pharmaceutical group worth close to $400 billion, ranking fourth in the industry by market value.