Panmure upgrades AstraZeneca on hopes of higher bid from Pfizer

29th Apr 2014 09:52

Panmure Gordon has upgraded its recommendation for AstraZeneca from 'hold' to 'buy', saying that a potential takeover by US pharmaceutical peer Pfizer is likely.The broker has hiked its target price for the stock from 3,900p to 5,400p.Pfizer confirmed on Monday that it had approached AstraZeneca in January regarding a potential 4,661p-a-share offer but had been rejected. It said that it is still considering a "possible transaction" that would see AstraZeneca shareholders receive a "significant premium for their [...] shares".Panmure said that a bid of 5,300-5,400p a share "may tempt AstraZeneca shareholders"."The transformation of AZN from an 'earnings based' company to an 'investment phase' biopharmaceutical organisation seems complete with news [...] of Pfizer's persistent attentions. Given Pfizer's track record of success in pursuing M&A targets, we upgrade the stock to 'buy' (from 'hold')."Panmure added that AstraZeneca's attractive biologicals infrastructure and pipeline, as well as its cancer immunotherapy pipeline, "seem to have forced the hand of Pfizer to act now rather than miss out in these potentially lucrative markets". The stock was 0.6% lower at 4,640p by 10:13 on Tuesday, following a near-15% surge the previous session.BC