AstraZeneca shares shorted as funds bet on Pfizer bid failing
Arbitrage players have been betting against the success of Pfizer’s GBP 63bn (EUR 77.38bn) takeover bid for the FTSE-100 pharmaceuticals group AstraZeneca, The Daily Mail reported on 13 May.
The report cited Karl Loomes of Astec Analytics who said the fact that AstraZeneca’s share price has gained on news of Pfizer’s potential offer suggests two possible scenarios. Either short sellers expect Pfizer’s offer to fail, in which case AstraZeneca shares will fall back, or the shorts believe the deal will proceed but that the shares have been overbought and will therefore eventually fall again.
Hedge funds have increasingly taken short positions in AstraZeneca stock over the past couple of weeks, the item said.
Increased political scrutiny of the proposed deal has led short sellers to believe the prospects of Pfizer’s bid succeeding are growing slimmer, according to the report.
AstraZeneca’s share price closed 32p up at 4642p in London yesterday, 13 May, giving the company a market capitalisation of GBP 58.59bn.
Source Daily Mail