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.