More on Astrazeneca, Cambridge Antibody
Astrazeneca agreed bid for Cambridge Antibody.
Astrazeneca has made an agreed takeover offer for Cambridge Antibody of 1,320p a share.
The offer is obviously good for Cambridge Antibody shareholders. It is at a 66% premium above yesterday’s close - and Cambridge Antibody as recently been trading at higher levels than it has done at any time since mid-2002.
Astrazeneca already owns 19% of CAT, and it is paying £567m for the remainder of the company. This is not a huge deal for a company the size of Astrazeneca, which has a market cap of around £45bn.
For Astrazeneca this is a smallish acquisition that gives the company greatly enhanced R & D in antibody technology, a key growth area. It is worth Astrazeneca paying this much, apart from our usual doubt about the ability of major pharmaceutical companies to get good returns on their R & D.
The deal does not have much effect on out view of the valuation of Astrazeneca. At 2850p the shares are slightly cheaper than when we last looked at the company. The prospective PE of 15× and the 2.6% yield are good given low risk, if slowing, medium term growth.
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