Actelion surges on Johnson & Johnson bid report

Actelion surged on Friday following a report that US healthcare group Johnson & Johnson has made a takeover bid for the Swiss biotechnology company.

According to Bloomberg, which cited people familiar with the matter, deliberations are still at an early stage following J&J’s initial offer and Actelion is working with an adviser to explore options although any discussions need not lead to a sale.

The initial offer for the Zurich-listed global leader in the field of pulmonary arterial hypertension (PAH) therapy was said to be $17bn (£13.65bn).

Olivetree Financial said: “Actelion has come a long way since the previously failed speculation and activism in 2010 / 2011 and still remains often touted as a potential M&A candidate. We understand that there is no obligation under Swiss law for Actelion to respond to this speculation, and the recent Syngenta / Monsanto situation suggests this is correct.

“However, it seems that the market believes there is more to today’s newsflow than it did in 2010. It is worth noting the move in Actelion implied volatility in last few days.The market started moving on 9th November – we are now sitting at markedly statistically significant levels, the volume market believes that there is something to these stories. Coupling this with the increases shown in cash volume would indicate that the market it more intrigued by this round of speculation than perhaps it has been in the past.”

In the past, Actelion chief Jean-Paul Clozel has insisted the company - which is in the process of developing drugs for insomnia, lupus and multiple sclerosis - planned to remain independent.

Exane BNP Paribas said Clozel remains fully committed to the business and would only consider selling to an acquirer who would preserve the Actelion culture.

“Assuming CHF500m of cost-savings (from a CHF1.3bn cost base) and 20% tax rate, we estimate NPV of synergies to be CHF45/share based on an 8% discount rate. We would anticipate that a successful acquirer would need to offer above CHF200/share.”

At 1227 GMT, the shares were up 14% to CHF180.40