Market Report: Shire readies the cash to splash on a spending spree

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The pharmaceutical company is said to be weighing a swoop for New Jersey-based NPS Pharmaceuticals following the collapse of Shire’s planned merger with AbbVie earlier in the year. AbbVie walked away, handing Shire a $1.64 billion (£1.04 billion) break-up fee and the company has also just arranged a $2.1 billion loan facility.

Shire is keeping quiet but Citi was happy to speculate. The bank thinks Shire would have to spend up to  $5 billion for NPS, which develops drugs for rare gastrointestinal diseases and endocrinology. The acquisition could add as much as £5.50 to Shire’s share price, says Citi, which reckons the deal could be one of several. The bank estimates Shire’s total war chest is $13 billion and if it were to spend it all the company’s share price could reach £74. Shire climbed 113p to 4634.5p.

The US Federal Reserve helped spark a Santa rally after the central bank signalled overnight that interest-rate rises may come faster than expected.

Tony Cross, market analyst at Trustnet Direct, said: “The benefits here are twofold, namely the fact that a stronger, US economy will increase demand for goods, whilst a bolstered US dollar means imports are cheaper — and repatriated profits look even  more impressive.”

The FTSE 100 rose 47.05 points to 6383.53.

Hong Kong billionaire Samuel Tak Lee cut his stake in Shaftesbury, off 5p at 749.25p. The property mogul now holds 3.86%, down from 4%.

Own-label house-cleaning products maker McBride, flat at 76.62p, has shown chief executive Chris Bull the door, tapping up Rik De Vos to lead its restructure. De Vos joins from Belgian insulation company Recticel.

After revealing last week that it was considering raising more funds to go after bigger fish, activist investment fund Crystal Amber today announced plans to raise at least £30 million through a placing. Crystal Amber, up 2.25p at 149p, has been in talks with an unnamed US fund over potentially taking a stake in J Sainsbury, 3p better at 232.65p, and pushing for changes.

Social-media company Audioboom tried in vain to halt a slide in its share price, plaintively reminding the market that its release yesterday was “a positive trading update”. Audioboom slipped 1p to 8.75p.

Neil Woodford-backed Mercia Technologies got off to a good start to life on AIM as shares rose to 53.5p after being priced at 50p. Mercia specialises in commercialising technology.

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December 18, 2014 |
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