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AstraZeneca shares sink 8% after $39 billion Alexion buyout
The stock has also been under pressure recently amid questions surrounding the efficacy of AstraZeneca’s potential Covid-19 vaccine and the way the late-stage trials were handled.
AstraZeneca Plc’s shares slumped to an eight-month low after it agreed to buy Alexion Pharmaceuticals Inc. for $39 billion in cash and stock, in what would be the U.K. pharma giant’s biggest deal ever.
The shares fell as much as 9.2% and touched their lowest level since April. The stock has also been under pressure recently amid questions surrounding the efficacy of AstraZeneca’s potential Covid-19 vaccine and the way the late-stage trials were handled.
The shares had pared their decline to 5.8% by 9 a.m. in London. Alexion, meanwhile, surged 32% in premarket U.S. trading to $159.95, below the $175-a-share offer price.
The offer, announced Saturday, would provide a 45% premium to Alexion’s closing price on Friday. Adding the specialist in immunology and treatments for rare diseases would be the largest deal for AstraZeneca since it was founded in a 1999 combination of British and Swedish companies.
Markus Manns at Union Investment, which holds AstraZeneca shares, said the company’s relative shortage of cash also raised concerns. While Alexion provides growth, the acquisition prompts questions over prospects for the U.K. company’s existing portfolio, he said.
“If you don’t have cash, don’t buy a large company unless it is a once-in-a-lifetime opportunity and has strong strategic merits,” Manns said. “You can hardly call this deal a once-in-a-lifetime opportunity and the strategic merits are weak.”
