Bristol-Myers Shares Rise on Takeover Speculation

Shares of Bristol-Myers Squibb climbed Wednesday, fueled by heightened takeover speculation, after a Financial Times article said the drug developer has hired three banking firms to advise it on how to handle buyout attempts ahead of a possible offer from France's Sanofi-Aventis .

The Financial Times story said Bristol-Meyers hired Lehman Brothers, Citigroup and Morgan Stanley as advisers.

Deutsche Bank Securities analyst Barbara Ryan in a client note said Bristol-Meyers is currently in a vulnerable position for a takeover.

The company is nearing the end of a patent trial on its blood thinner Plavix, which has recently lost sales due to the introduction of a generic. On top of that, the company is currently being led by an interim chief executive, she wrote.

Bristol-Meyers is worth about $26 per share, but could fetch a buyout price in the low $30s-per-share, the analyst wrote.

New Jersey-based drug developer Wyeth is the only other likely suitor for Bristol-Meyers, wrote Ryan.

UBS Investment Research analyst Roopesh Patel in a client note kept a "Neutral" rating on Bristol-Meyers with a $27 target price. The analyst noted that Sanofi is able to move early on Bristol-Meyers, given its inside knowledge of the Plavix patent case.

Both analysts said they don't expect a bidding war over Bristol-Meyers to ensue.

Contact U.S. News


    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • Mad Money's Jim Cramer breaks down the theme of stealth technology stocks. Cramer says companies that are using proprietary technology to invent entirely new markets and then dominate those markets, fall under that category.

  • Mad Money host Jim Cramer knows it can be difficult to stick with a stock that is going lower but says if you've done the homework, and the story isn't wildly off the rails, then stay long.

  • Mad Money host Jim Cramer, outlines the most common emotionally driven investor mistakes and expresses why it is important to not let skepticism run away with you.