(BN) Pfizer Said to Plan Raising AstraZeneca Bid for Second Time (1)


Pfizer Said to Plan Raising AstraZeneca Bid for Second Time (1)
2014-05-13 00:52:21.616 GMT


     (Updates with tax benefit in seventh paragraph.)

By David Welch, Albertina Torsoli and Manuel Baigorri
     May 13 (Bloomberg) -- Pfizer Inc. is planning to sweeten
its bid for U.K. rival AstraZeneca Plc for a second time, people
with knowledge of the matter said.
     Pfizer and its advisers are crafting a new offer that would
increase the value modestly above the current 50 pounds-a-share
(about $84) level while bumping the cash portion, said two of
the people, who asked not to be identified discussing private
information. Pfizer will probably wait until after U.K.
government hearings to raise its bid, they said.
     Pfizer is putting together a sweetened offer before it
considers whether to make a hostile takeover attempt by bringing
its proposal directly to AstraZeneca’s shareholders, the people
said. Pfizer would prefer a friendly deal since its unsolicited
overture already has attracted political scrutiny in the U.S.
and U.K. AstraZeneca rejected Pfizer’s second proposal on May 2,
valued at 62.6 billion pounds ($106 billion) and made up of 32
percent cash and the rest in stock.
     Ian Read, Pfizer’s chief executive officer, and Pascal
Soriot, his counterpart at AstraZeneca, will testify at two
separate parliamentary committees this week, as the U.K.
government seeks guarantees that Pfizer will preserve jobs and
medical research in Britain.
     Pfizer is concerned it’s beginning to lose momentum on the
deal, said two of the people, and will be talking further to
investors and listening to what comes out of the hearings as it
evaluates its next steps.
     Representatives for Pfizer and AstraZeneca declined to
comment.

                            Tax Rates

     Pfizer has said it would move its legal residence to the
U.K., gaining a lower tax rate, while the company’s operational
headquarters would remain in New York. In doing so, Pfizer would
join more than a dozen other companies that have said they are
making or considering such transactions since 2012.
     Read has said the tax benefits, the chance to avoid U.S.
taxes on $70 billion in cash built up overseas and AstraZeneca’s
promising cancer medicines are among the reasons Pfizer is
pursuing the deal.
     The tax issue has sparked criticism from U.S. lawmakers,
including Senator Ron Wyden, an Oregon Democrat and chairman of
the Senate Finance Committee that oversees tax legislation.
Wyden said he may take up a proposal that would make it harder
for U.S. companies to shift their legal addresses to avoid
taxes.

                           Cancer Drug

     A deal with AstraZeneca would help Pfizer add early-stage
drugs that use the body’s own immune cells to recognize and
attack tumors. Atop the list is MEDI4736, AstraZeneca’s immuno-
oncology drug expected to compete with experimental therapies
from drugmakers including Bristol-Myers Squibb Co., Merck & Co.
and Roche Holding AG.
     British lawmakers earlier this month mobilized against
Pfizer’s attempt, demanding Business Secretary Vince Cable
secure assurances on jobs and research investment. Part of
Pfizer’s pitch to British officials is that AstraZeneca is a
global company and has substantial operations and people outside
the country, said one of the people.
     About 40 percent of AstraZeneca’s revenue in 2013 came from
North America, and more than 30 percent from outside of Europe,
data compiled by Bloomberg show.
     AstraZeneca Chairman Leif Johansson said the drugmaker will
return to growth as an independent company and listed the
reasons for rejecting the Pfizer offer in a video this month.
Among them: The bid “significantly undervalued” the company,
he said.

                         Job Assurances

     Pfizer has pledged to keep at least one-fifth of the
combined companies’ research and development workers and
substantial manufacturing plants in the U.K. for at least five
years after a deal.
     In the U.S., the governors of Maryland and Delaware have
asked for similar assurances, raising concerns that Pfizer would
reduce about 5,700 AstraZeneca jobs in their states as part of a
cost-cutting effort after the acquisition. Read wrote the
governor’s yesterday saying it was too soon in the effort to
gain AstraZeneca to discuss potential effects on jobs.
     An acquisition of AstraZeneca would add to the $127 billion
of mergers among pharmaceutical companies this year, according
to data compiled by Bloomberg. An industrywide recalibration
that has been building since 2011 reached a peak last month with
a flurry of activity by GlaxoSmithKline Plc, Novartis AG and
Valeant Pharmaceuticals International Inc.

For Related News and Information:
AstraZeneca Pipeline Is Lottery Ticket in Pfizer’s Pursuit
NSN N5GYUY6S972K <GO>
Pfizer-AstraZeneca Deal May Harm Search for New Medicines
NSN N4Y3MD6JTSEL <GO>
Pfizer’s Bid May Have Been Invited by U.K.’s Tax Policy
NSN N4R75Q6KLVS1 <GO>
Top health stories:TOP HEA <GO>
Bloomberg Industries Research: BI PHRM <GO>

--With assistance from Naomi Kresge in Berlin, Drew Armstrong in
New York and Michelle Fay Cortez in Minneapolis. 

To contact the reporters on this story:
David Welch in New York at +1-212-617-2788 or
dwelch12@bloomberg.net;
Albertina Torsoli in Geneva at +41-22-317-9202 or
atorsoli@bloomberg.net;
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman, Andrew Pollack

>>> US After. Hours

After Hours Summary: RAX +12.7%, HALO +12.0%, APRI +9.3%, FTEK -23.5%, RDEN -16.7% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: RAX +12.7%, HALO +12.0%, APRI +9.3%, TC +7.1%, OSIR +5.6%, HMIN +5.6%, MBI +4.1%, PTLA +3.6%, PVA +2.8%, MCK +2.7%, DTSI +2%, NOAH +1.9%, HEAR +1.3%, EVDY +1.2%, BWC +0.2%, PCYG +0.1%, TWOU +0.1%

Companies trading higher in after hours in reaction to news: HALO +12.0% (Data Monitoring Committee for Study 202 of PEGPH20 now supports continued enrollment of patients; co also reported earnings), APRI +9.3% (received FDA clearance to begin clinical trial of RayVa for secondary Raynaud's phenomenon; co also reported earnings), DTV +6.1% (Bloomberg reporting that co and AT&T (T) are in talks of a deal for DTV to be acquired for ~$100 per share), ANR +1.3% (announced offering of $400 mln senior secured second lien notes), XOXO +1.1% (Becker Drapkin confirmed 7.2% stake in 13D filing; intends to engage company and may nominate or recommend candidates for the Board)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: FTEK -23.5%, RDEN -16.7%, OESX -13.1%, KIN -8.9%, CALL -6.5%, CWCO -5.9%, DARA -3.7%, ARNA -3.2%, VGR -3.2%, RICK -2.2%, HASI -1.9%, RMTI -1.4%, ONTX -1.3%, APP -1.3%, LMNS -1.3%, DQ -0.7%, TCRD -0.5%, FENG -0.4%

Companies trading lower in after hours in reaction to news: BIOF (received a letter from the Listing Qualifications Staff; continued listing of its securities is no longer warranted), FNHC -4.7% (filed for $50 mln mixed securities shelf offering), OKS -3.9% (announced public offering of 11 mln of common units), IDRA -3.5% (filed for $200 mln mixed securities shelf offering), NRF -2.2% (announced public offering of 30 mln shares of common stock), AR -1.5% (announced secondary public offering of 10 mln shares common stock by Antero Resources Investment), DQ -0.7% (announced proposed follow-on public offering of 2 mln ADSs)

>>> Asian Update

Asian Market Update: Australia property sector growth slows; China weakens CNY further despite the visit from Lew

***Economic Data*** - (AU) AUSTRALIA Q1 HOUSE PRICE INDEX Q/Q: 1.7% (1-year low) V 3.0%E; Y/Y: 10.9% V 10.4%E - (AU) AUSTRALIA MAR HOME LOANS M/M: -0.9% V +1.0%E; INVESTMENT LENDING: -0.8% V +4.4% PRIOR; OWNER-OCCUPIED LOAN VALUE: -1.2% V +1.8% PRIOR - (NZ) NEW ZEALAND APR FOOD PRICES M/M: +0.6% V -0.3% PRIOR (1st rise in 3 months) - (NZ) NEW ZEALAND APR ANZ TRUCKOMETER HEAVY M/M: +0.5% V -1.0% PRIOR - (JP) JAPAN APR MONEY STOCK M2 Y/Y: 3.4% V 3.4%E (one-year low); M3 Y/Y: 2.8% V 2.8%E - (UK) UK APR BRC SALES LFL Y/Y: 4.2% V 1.6%E (1st rise in three months; 3-year high)

Market Snapshot (as of 03:30 GMT): - Nikkei225 +1.7%, S&P/ASX +0.7%, Kospi +0.9%, Shanghai Composite flat, Hang Seng +0.2%, Jun S&P500 +0.1% at 1,894, Jun gold -0.2% at $1,293, Jun crude oil -0.1% at $100.54/brl

***Highlights/Observations/Insights*** - China markets are slightly more subdued after outsized gains overnight on reports of China State Council gradually relaxing FDI limits in listed companies. Economic data from China overnight were also mixed, with new Yuan loans missing estimates but M2 money supply growing above expectations. Investors await the release of the rest of April metrics - retail sales, industrial production, and FDI - later in today's session. In notable Chinese press, CSRC announced and additional 6 applicants for IPO, bringing the total pre-IPO disclosure filings to 319 since Apr 19th. On the currency front, PBoC once again set its Yuan midpoint at an 8-month low despite the impending visit from US Treasury Sec Lew, who is under increasing domestic pressure to take a more hard-line position on China's currency policy.

- Slowing growth in property prices in Australia may continue to soothe RBA worries of overheating in the sector, with Q1 house price index slowing to a 1-year low. Mortgage lending also turned negative on the month for the first time in 3 months. JPMorgan economist noted there has been a "deceleration from the euphoria that we saw in the second half of last year" and the economy is undergoing a "slower pace of demand filter through to house prices." Also note that Australia will unveil its annual budget - one of the toughest in govt's recent history - later in today's session.

- In M&A, shares of DTV were sharply higher afterhours after a press report suggested the company is in talks with AT&T over a $100/shr ($50B) deal. Separately, Pfizer was said to be looking to sweeten the cash component of its takeover bid for AstraZaneca and may present its new offer after UK parliamentary hearings. If rejected, Pfizer would reportedly consider a hostile takeover.

- Shares of Rusal are up nearly 3% in Hong Kong despite reporting a Q1 loss of $169M v profit $49M y/y. Rev also fell to $2.12B v $2.68B y/y, but the company forecasted a 6% rise in global aluminum demand in 2014 to 55Mt.

***Fixed Income/Commodities/Currencies*** - (JP) Japan MoF sells ¥545.9B in 1.7% (1.7% prior) 30-yr notes; Avg yield: 1.708% v 1.696% prior; Bid to cover: 4.62x v 2.93x prior - (CN) PBoC to drain CNY97B in 28-day repos (24th consecutive drain) - GLD: SPDR Gold Trust ETF daily holdings fall 2.4 tonnes to 780.5 tonnes (lowest since Jan 2009) - USD/CNY: (CN) PBoC sets yuan mid point at 6.1636 v 6.1625 prior setting (weakest since Sept 9th 2013)

***Equities*** US markets: - RAX: Reports Q1 $0.18 v $0.12e, R$421M v $420Me; +13.3% afterhours - DTV: Reportedly deal with AT&T being discussed is around $100/shr which would vale the deal at $50B - financial press; +5.9% afterhours - MBI: Reports Q1 $1.32 v $0.84 y/y, R$577M v $219M y/y; +3.9% afterhours - CVG: Reports Q1 $0.32 v $0.29e, R$606M v $548Me; Raises quarterly dividend 17% to $0.07 from $0.06; +3.5% afterhours - MCK: Reports Q4 $2.55 v $2.38e, R$38.1B v $35.2Be; +3.3% afterhours - AZN: Pfizer said to be raising cash part of bid; may consider going hostile if offer fails - financial press; +1.4% afterhours - TELK: MabVax Therapeutics and Telik Sign Definitive Merger Agreement; -4.6% afterhours - RDEN: Reports Q3 -$0.84 v $0.02e, R$210.8M v $256Me; Hires Goldman to advise on strategic alternatives; -16.7% afterhours

Notable movers by sector: - Financials: Ping An Insurance 2318.HK +1.0% (launches online financial product); Greentown China 3900.HK +2.3% (Apr sales results); Poly Property 119.HK +2.5% (Apr sales results) - Energy: Sinopec Shandong Taishan Petroleum 000554.CN +10.0%, Sinopec Shanghai Petrochemical 600688.CN +6.0% (PetroChina to sell Eastern Pipeline Co to public) - Industrials: Orica ORI.AU -5.4% (H1 results); China Resource Cement 1313.HK +2.7% (Q1 results); Shenzhen Auto Electric Power Plant 002227.CN +1.4%, BYD Corp 002594.CN +1.8% (China started construction of EV charging centers); Nissan Motor 7201.JP +4.5% (FY13/14 results); Isuzu Motors 7202.JP +5.7% (FY13/14 results); Mitsubishi Chemical Holdings 4188.JP +3.2% (plans to acquire Taiyo Nippon Sanso) - Technology: Square Enix Holdings 9684.JP +9.7% (analyst action); Sharp 6753.JP +5.4% (FY13/14 results)

>>> US Close Dow+0,68% S&P+0,97% Nasdaq+1,77%

Closing Market Summary: Small Caps Lead Stocks Higher

The stock market kicked off the new trading week on an upbeat note with small caps leading the advance after showing relative weakness last week. The Russell 2000 surged 2.3%, while the S&P 500 gained 1.0%. Even though the benchmark index posted a slimmer gain than the Russell 2000, it still managed to register a fresh closing record high at 1,896.65. Similarly, the Dow Jones Industrial Average (+0.7%) also settled at a new record high.

Small caps faced some heavy selling last week, while indices with a significant concentration of large cap listings were able to withstand the pressure. Today, however, the areas that struggled last week displayed relative strength, while the Dow and S&P 500 posted more modest gains.

Eight of ten sectors finished in the green with a clear bias towards cyclical groups as consumer discretionary (+1.3%), financials (+1.0%), industrials (+1.5%), materials (+1.3%), and technology (+1.5%) all posted gains of 1.0% or more, while the energy sector (+0.6%) was the only laggard among cyclical sectors.

The largest S&P 500 sector—technology—finished in the lead thanks to a boost from high-growth names like Facebook (FB 59.83, +2.59), LinkedIn (LNKD 152.28, +3.59), and Yelp (YELP 56.60, +2.38); however, it is worth pointing out that other areas of the sector also had a strong showing. Top sector members Apple (AAPL 592.83, +7.29) and Microsoft (MSFT 39.97, +0.43) both gained near 1.1%, while the broad strength among chipmakers sent the PHLX Semiconductor Index higher by 1.8%.

Elsewhere, the discretionary sector also received a measure of support from momentum names, but retailers and homebuilders were not far behind. The SPDR S&P Retail ETF (XRT 84.88, +1.62) and iShares Dow Jones US Home Construction ETF (ITB 23.70, +0.49) posted gains close to 2.0% apiece.

With nearly all cyclical sectors finishing ahead of the broader market, the only soft spots were found on the countercyclical side. The health care sector (+1.0%) ended ahead of the broader market, while consumer staples (+0.1%), telecom services (-0.2%), and utilities (-1.0%) lagged.

Treasuries retreated throughout the session, ending just above their lows. The benchmark 10-yr yield rose two basis points to 2.65%.

Participation was well below average as less than 630 million shares changed hands at the NYSE.

Also of note, Ukraine's regions of Donetsk and Lugansk have declared independence after Sunday referendums showed overwhelming support for breaking away from Ukraine. Following yesterday's vote, the council of Donetsk has petitioned for accession to the Russian Federation.

Economic data was limited to the Treasury budget, which posted a surplus of $106.90 billion in April 2014, down from a surplus of $112.90 billion in April 2013. The Treasury data are not seasonally adjusted and the April surplus cannot be compared with the results from March. The consensus expected a budget surplus of $114.00 billion. The Congressional Budget Office released their monthly budget preview last week and predicted a surplus of $114.00 billion. The market is well aware of the CBO's forecast and generally does not react to the actual budget release.

Tomorrow, the Retail Sales report for April (consensus +0.3%) and April Import/Export Prices will be released at 8:30 ET, while the Business Inventories report for March (consensus +0.4%) will cross the wires at 10:00 ET.

* S&P 500 +2.6% YTD  * Dow Jones Industrial Average +0.7% YTD  * Nasdaq Composite -0.8% YTD  * Russell 2000 -2.5% YTD

(BFW) *CLUB MED: BOUSSARD & GAVAUDAN WON’T SELL SHARES TO GAILLON BID

+------------------------------------------------------------------------------+

CRL 05/12 14:14 EUROMEDIS IS 28.62% OWNED BY NINA, AMF SAYS (FRENCH) CRL 05/12 14:12 FONCIERE INEA IS 14.15% OWNED BY MM PUCCINI, AMF SAYS (FR) BFW 05/12 14:18 *CLUB MED: BOUSSARD & GAVAUDAN WON’T SELL SHARES TO GAILLON BID BN 05/12 14:16 *CLUB MED: BOUSSARD & GAVAUDAN WON'T SELL SHARES TO GAILLON BID BN 05/12 14:14 *EUROMEDIS IS 28.62% OWNED BY NINA, AMF SAYS BN 05/12 14:12 *FONCIERE INEA IS 14.15% OWNED BY MM PUCCINI, AMF SAYS

+------------------------------------------------------------------------------+

CLUB MED: BOUSSARD & GAVAUDAN WON'T SELL SHARES TO GAILLON BID 2014-05-12 14:17:04.527 GMT

(The following press release from the AMF was received by e-mail. The sender verified the statement.)

-0- May/12/2014 14:17 GMT

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: GOGO +7.5%, INO +5.6% (light volume), HPJ +3.3% (light volume), CGA +2.1%.

M&A news: PF +20.5% and HSH +3.4% (Pinnacle Foods to be acquired by Hillshire Brands for $18.00 in cash and 0.50 shares of Hillshire Brands common stock; implied purchase price based on 10 day average closing price of HSH is $36.02 per share), TWTR +3.1% and FB +1% (Barron's suggests Facebook could target Twitter; TWTR upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey), YELP +1.1% ( Bloomberg discusses that YELP may be a possible takeover target), AZN +1% and PFE +0.4% (Pfizer execs have indicated that Asterzenca buyout will be a 'win-win', according to reports), SHPG +0.3% (Shire plc will acquire Lumena Pharma for an upfront payment of $260 mln in cash, plus a payment for net cash at closing, and near-term contingent milestone payments related to ongoing clinical trials), AGN +0.1% (Allergan Board Unanimously rejects unsolicited proposal from Valeant (VRX); Co Expects to Increase EPS by 20-25 % in 2015 and by 20% CAGR over Next Five Years), S +0.8% (Deutsche Telekom wants $1 bln breakup fee over TMobile / Sprint deal, according to reports), .

Select metals/mining stocks trading higher: RIO +3.5% (added to European Focus list at JP Morgan), HMY +2.3%, BHP +1.7% and MT +0.4% (ArcelorMittal is in discussions to purchase BHP Billiton's Guinea iron-ore asset), FCX +1.7%, SLV +1.3%, GOLD +0.9%, GDX +0.5%, GLD +0.5%

A few China internet names showing strength: WUBA +3.5%, QIHU +2.8%, YY +2.5%.

Coal names trading higher: BTU +2.6% (upgraded to Overweight from Equal-Weight at Morgan Stanley), ACI +2.6%, WLT +1.8%,

Other news: TSEM +7.6% (still checking, light volume), TSRO +7.5% (announces successful achievement of primary and all secondary endpoints in third and final Phase 3 trial of rolapitant; achieved primary endpoint of complete response in the delayed period following initiation of chemotherapy), KERX +7.3% (The Baupost Group declares 10.07% passive stake in 13G filing ), ALNY +5.6% (announces new RNAi Therapeutic Program for the Treatment of Hepatitis B Virus (HBV) Infection and Reports an Up to 2.3 Log10 Reduction of HBV Surface Antigen (HBsAg) in Chronically Infected Chimpanzees), RMTI +4.8% (seeing continued strength following Friday's +10% move), RLYP +4.6% (announced topline results from its Phase 1 onset-of-action study of patiromer, the final clinical trial planned to support a New Drug Application), ALU +3.9% and NOK +0.8% (Alcatel-Lucent exec says company not focused on Nokia (NOK) deal, according to reports ), RSH +3% (Standard General discloses 9.8% passive stake in SC 13G filing), TTM +2.8% (still checking), BCO +2.6% (following positive Barron's mention), ARMH +2.1% (still checking), ABB +1.9% (still checking), TSLA+1% (discloses in 10-Q that production activities with Toyota (TM) for the Rav-4 are expected to end in 2014), AMZN +0.9% (Amazon.com and Italian bookstore chain Giunti announce exclusive agreement to launch a new bookstore model for Italy), BP +0.9% (BP plans to invest $1.5 bln in Egypt, according to reports ), GS +0.6% (following positive Barron's mention), AMGN +0.5% (Amgen and AstraZeneca (AZN) announce positive results from Phase 3 study of brodalumab (AMG 827) in patients with moderate-to-severe plaque psoriasis), CHL +0.5% (following positive Barron's mention), AAPL +0.3% ( Tablet shipments overall growth has slowed to 21%, MacBook shipments in Q2 rise 28.6% QoQ, according to reports), .

Analyst comments: LOGI +5.4% ( upgraded to Outperform from Neutral at Credit Suisse), IRDM +4.3% (Iridium upgraded to Outperform from Neutral at Macquarie), WB +2.5% (Weibo initiated with an Overweight at Piper Jaffray), BDBD +2.2% (Boulder Brands upgraded to Buy from Neutral at SunTrust)

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: BPI -12.1%, CLB -4.8%, DRH -1.5%.

Other news: ETRM -6.8% ( files for $75 mln mixed securities shelf offering ), AEZS -3.8% ( announces 14.02 mln At the Market Issuance Program ), PGTI -3.2% (appoints Jeff Jackson as new President and Chief Operating Officer), AIG -2.4% (Hancock & Wintrob in lead for AIG CEO, according to reports ), E -1.2% (still checking), INSY -0.9% (continued weakness--see16:02 for color).

Analyst comments: BCS -2.2% (downgraded to Neutral from Outperform at Exane BNP Paribas, downgraded to Sector Perform at RBC Capital Mkts), NTAP -0.6% (downgraded to Mkt Perform from Outperform at Raymond James), DE -0.3% (downgraded to Underperform from Neutral at Longbow).