Amid the current takeover frenzy in the healthcare sector, Shire has come back into the City's sights as a possible target.
Shire shares moved higher earlier in the week on talk that Botox maker Allergan might take a look at the Dublin-based company to help fend off an unwanted bid from Valeant Pharmaceuticals.
The excitement cooled on subsequent reports that Allergan might seek a deal with Sanofi or Johnson & Johnson instead.
Now analysts at Societe Generale have suggested that AstraZeneca could mount a £30bn bid for Shire to escape its own predator, Pfizer. SocGen said:
According to an unsubstantiated Reuters report, Allergan could bid for Shire as part of its defence against a hostile bid from Valeant Pharmaceuticals. We think a more likely scenario is that AstraZeneca could bid for Shire as part of its defence should an unwanted bid be lodged for AstraZeneca by Pfizer by the 26 May Takeover Panel deadline.
Given appreciation in AstraZeneca's shares (now trading on 19 times 2015 PE versus Shire on 14.1 times), it could plausibly launch an all-equity bid, which with modest cost savings could be significantly earnings accretive for AstraZeneca.
Shire is currently 112p higher at £33.75 while AstraZeneca has added 38p to 4670.5p.
