Jefferies thinks Boston Scientific Corp’s (NYSE:BSX) £3.3bn offer for British pharmaceutical firm BTG PLC (LON:BTG) is fair and it doesn’t expect a rival bid to be forthcoming.
Boston made the 840p a share offer, which has been recommended by the BTG board, earlier this month as part of its plans to expand into the cancer-fighting medical devices field.
READ: Boston Scientific eyes medical devices growth with £3.3bn BTG acquisition
“Whilst the offer is below our 900p NPV (net present value) sum-of-the-parts [valuation], we continue to believe the offer is fair given BSX's stated focus on the cancer and pulmonary embolism franchises,” said analysts in a note to clients.
“Whilst we do not think counterbids are likely, given BTG's somewhat eclectic product mix and the recommended offer, we highlight there has been competition for Interventional Oncology assets in the past.
“Australian based Sirtex focused on oncology beads and was eventually acquired by China based CDH Investments in June 2018, following an initial bid from Varian.”
Reflecting their belief that there is unlikely to be a bidding war, Jefferies analysts downgraded the stock to ‘hold’ from ‘buy’ and cut their target to the offer price of 840p.
BTG shares were dropped 2p on Friday to sit at 833p.