>>> Teva Bid Talk Hard To Swallow
Lionel Laurent, 08.15.08, 9:50 AM ET
LONDON -
Excited investors hoping that Israel's Teva Pharmaceuticals will strike an imminent deal with German generics-maker Stada Arzneimittel may be forced to take a chill pill.
Even as shares in Stada jumped 10.6%, or 3.42 euros ($5.04), to 35.56 euros ($52.38) per share, during afternoon trading in Frankfurt on Friday, after a press report claimed Teva was in talks to potentially bid for the firm, some industry watchers remained skeptical.
"We think this is unlikely to happen, for timing reasons," said Andreas Thiesen, analyst with WestLB Research. He told Forbes.com that Teva was still busy completing its biggest ever deal, the $7.5 billion acquisition of American generics-maker Barr International, and that it was unlikely to embark on another bid for a company worth 1.9 billion euros ($2.8 billion). (See "Teva Ticks Up A Barr")
Stada also seems to be in no hurry to be taken over. Thiesen told Forbes.com that Stada's chief executive had quashed bid speculation earlier this week, stressing that the company was not in talks and wished to remain independent. Although Thiesen said that things could change in two days, he did not believe a bid was a likely outcome right now.
A spokesperson for Teva said that it did not comment on "future activities." A spokesman for Stada refused to comment on the speculation, and also refused to refer directly to the chief executive's comments earlier in the week.
There is no doubt that Stada would still be a good strategic fit with Teva. Stada has a 12.0% share of the German market, which is the biggest generics market in Europe; Teva's lies somewhere in the low single digits. Dresdner Kleinwort analyst Christoph Eckert believed that Teva was looking to expand its European presence, and that an offer for Stada could hit 45 euros ($66.30) per share, or a premium of 26.5% to the current share price.
But HSBC analyst Christian Packebusch said Teva's product portfolio and pricing power would give it opportunities to grow alone in Germany, particularly with a new round of tenders from German health insurer AOK to supply generics drugs worth 2.3 billion euros ($3.4 billion). <<<
