Panmure expects another bid for AstraZeneca in coming weeks

7th May 2014 10:32

AstraZeneca (AZN) shareholders should expect a further bid from Pfizer to materialise in the coming weeks, according to Panmure Gordon which kept a 'buy' rating on the stock.AZN on Tuesday set out its defence against a takeover, saying its strong growth prospects and developing drug pipeline warrant it remaining as an independent company. This follows the sweetened £55-a-share offer from Pfizer that was rejected last Friday.The company said it aims to generate annual revenues of $45bn by 2023, a near-doubling from estimated sales of $23.8bn in the trough year of 2017, according to Panmure. It also pointed to possible peak-year revenues of $63bn.Panmure's pharma analyst Savvas Neophytou said that while these new targets "look challenging", AZN's pipeline is "rapidly evolving and progressing which makes the timing of Pfizer's bid highly opportunistic"."On the back of AstraZeneca's outlining its defence strategy that hopes to convince shareholders to hold out for a much higher bid, we provided an implied valuation up to £105 per share using these new 'management' case assumptions."He added: "Clearly the management has some convincing to do as most analysts remain sceptical on the achievability of these targets but at least it sets out the rationale why management turned down Pfizer's advances last week."Panmure said that given AZN is currently in the 'investment phase' it has not been focused on maximising earnings this year and the next, so near-term deal valuation metrics look "rich"."We have set out relatively conservative assumptions which should make a bid of £55 per share easily achievable for Pfizer. We expect the recent flurry of noise coming from government to provide relatively little of substance and expect a further bid to materialise in coming weeks."The stock was down 1.4% at 4,613.5p by 11:56 on Wednesday.BC