By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks gained Monday, as
AstraZeneca PLC shares soared after Pfizer Inc. said it's tried
again to court the drug maker into a multibillion-dollar takeover,
but investors pulled down shares of Siemens AG as the company moved
to buy a unit from France's Alstom SA.
The Stoxx Europe 600 picked up 0.2% to 334.13, topped by a 14%
rally in AstraZeneca (AZN) to 46.66 British pounds ($78.42) after
U.S. pharmaceutical maker Pfizer Inc. (PFE) said it made a second
attempt to talk to AstraZeneca about a merger "in light of recent
market developments," but AstraZeneca again declined to engage.
Monday's rally made up more than half of AstraZeneca's 31%
share-price gain so far this year.
The Ukraine conflict was also still in view as the U.S. imposed
fresh sanctions against Russia. The U.S. claims Russia didn't hold
up its end of an April 17 deal aimed at de-escalating tensions in
eastern Ukraine. The latest sanctions target seven Russian
officials and 17 companies the U.S. says are linked to President
Vladimir Putin's inner circle.
Mohamed El-Erian, who left investment firm Pimco earlier this
year, said in a CNBC interview early Monday sanctions against
sectors such as energy and finance would make a greater impact on
Russia's economy rather than just targeting individuals.
Back to AstraZeneca, the company was "playing hard to get," said
Barclays in a report Monday. Taking their previous assumptions
regarding a split between equity/cash and cost synergies of 10%,
"we calculate Pfizer could pay up to GBP56.00 per share or $117
billion for AstraZeneca before transaction costs neutralize any
anticipated earnings accretion," said the analysts.
AstraZeneca in a statement Monday said an offer made in November
by Pfizer representing GBP46.61 for each share "very significantly
undervalued AstraZeneca and its prospects."
Meanwhile, Pfizer said on Monday it's "confident a combination
is capable of being consummated."
Bayer AG's Chief Executive Marijn Dekkers, appearing on CNBC
International on Monday, said pharmaceutical companies "in general
are concerned about prices that governments are willing to pay for
our innovative drugs" and that pressures on pricing and protections
for patents are resulting in attempts by companies to bring their
resources together.
Bayer shares closed up 3.3% after the German pharmaceutical
company posted a more than 20% jump in first-quarter profit.
Separately, Bloomberg reported that Bayer is considering the sale
of its plastics unit to focus on its health business.
But shares of Meda AB underperformed other pharma stocks tracked
on the Stoxx 600, falling 7.8% after the Swedish specialty
pharmaceuticals company rebuffed a sweetened acquisition bid from
U.S. generic drug maker Mylan Inc. (MYL) .
Elsewhere on the M&A front, Siemens AG (SI) shares fell 2.5%
after the German industrial conglomerate over the weekend bid $14
billion for energy units owned by French rival Alstom . The bid
counters an offer by U.S. rival General Electric Co. (GE). Shares
in Alstom have been halted since Friday.
On the benchmark indexes, U.K.'s FTSE 100 rose 0.2% to 6,700.16,
Germany's DAX 30 gained 0.5% to 9,446.36, and France's CAC 40
advanced 0.4% to 4,460.53.
More news from MarketWatch:
What an AstraZeneca deal could do for Pfizer's 'war chest,'
taxes
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