May 20, 2013
10:03 EDT SHPG, BMY Shire advances after report renews takeover speculation
Shire (SHPG) is climbing in a down market after a British newspaper reported that the company is looking to return up to 2B pounds to its shareholders in an attempt to stave off a possible takeover. WHAT'S NEW: The British drug company has asked investment banks to develop plans for returning cash to shareholders, amid speculation that it will become a takeover target for an American pharmaceutical firm, the Daily Mail reported yesterday. According to the rumors, the American company is preparing to launch a hostile takeover bid for Shire for 11B pounds. Bristol-Myers Squibb (BMY) has reportedly recruited advisers to study an acquisition of Shire, which makes drugs that treat attention deficit hyperactivity disorder, the newspaper added. ANALYST REACTION: In a note to investors earlier today, Leeink Swann analyst Jason Gerberry called the Daily Mail's report "highly specific," and wrote that Shire was a "feasible takeover target." A takeover of Shire by Bristol-Myers would make sense, as Shire has resolved most of the problems facing its generic drugs, making the company more attractive to a strategic buyer, the analyst added. Gerberry believes a takeover price would need to be at least $110 per Shire share for the company’s board to be interested. The analyst kept an Outperform rating on the stock. TODAY'S PRICE ACTION: In early trading, Shire advanced $1.10, or 1.2%, to $94.50, while Bristol-Myers rose 61c to $43.91.
10:03 EDT SHPG, BMY Shire advances after report renews takeover speculation
Shire (SHPG) is climbing in a down market after a British newspaper reported that the company is looking to return up to 2B pounds to its shareholders in an attempt to stave off a possible takeover. WHAT'S NEW: The British drug company has asked investment banks to develop plans for returning cash to shareholders, amid speculation that it will become a takeover target for an American pharmaceutical firm, the Daily Mail reported yesterday. According to the rumors, the American company is preparing to launch a hostile takeover bid for Shire for 11B pounds. Bristol-Myers Squibb (BMY) has reportedly recruited advisers to study an acquisition of Shire, which makes drugs that treat attention deficit hyperactivity disorder, the newspaper added. ANALYST REACTION: In a note to investors earlier today, Leeink Swann analyst Jason Gerberry called the Daily Mail's report "highly specific," and wrote that Shire was a "feasible takeover target." A takeover of Shire by Bristol-Myers would make sense, as Shire has resolved most of the problems facing its generic drugs, making the company more attractive to a strategic buyer, the analyst added. Gerberry believes a takeover price would need to be at least $110 per Shire share for the company’s board to be interested. The analyst kept an Outperform rating on the stock. TODAY'S PRICE ACTION: In early trading, Shire advanced $1.10, or 1.2%, to $94.50, while Bristol-Myers rose 61c to $43.91.