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Summary
- AstraZeneca shares slumped to an eight-month low after the announcement of the Alexion deal
- With the Monday’s plunge, the YTD return of the AstraZeneca stock has once again turned negative
The shares of Cambridge-headquartered pharma giant AstraZeneca Plc (LON: AZN) tumbled by more than 9 per cent to an eight-month low on Monday after the company announced a $39-billion deal to acquire Boston-based drug maker Alexion Pharmaceuticals Inc (NASDAQ:ALXN).
The stocks got hammered in the early morning trades on Monday with the benchmark FTSE 100 index opening largely flat. Going by the decade-long dividend-paying history of AstraZeneca, the company is expected to announce an interim dividend after the completion of FY20, which is to be paid in March 2021.
(Image Source: ©Kalkine Group 2020)
AstraZeneca Plc slips to 8-month low
As per the data available with the London Stock Exchange, the stock of AstraZeneca slipped by as much as 9.19 per cent to an eight-month low of GBX 7,410 from the previous closing price of GBX 8,160 as on 11 December. Today’s steep decline in the share prices has wiped out a considerable gain realised during the recovery period in April from the multi-month bottom levels seen after the Covid-19 pandemic rattled the stock markets globally.
AstraZeneca Plc shares (14 December)
(Source: EODHD/Others, Thomson Reuters)
AstraZeneca shares recovered partly on Monday as the trading progressed touching an intraday peak of GBX 7,824 per share. At around 13:16 (EDT), the stock of AstraZeneca was trading at GBX 7,607, down 6.78 per cent from the last closing. More than 3.58 million shares of AstraZeneca exchanged hands until 13:05 (EDT), translating into a total traded turnover of £218.14 million.
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YTD return turns negative
The last one month had been unfavourable for the shares of AstraZeneca with the stock losing a little over 7 per cent between 11 November and 11 December. The stocks, which showed a steady upswing from the Covid-19-led lows up until mid of July along with successive positive trading sessions in September and the first half of November, have again turned negative on a year-to-date (YTD) scale. Incorporating today’s plunge, AstraZeneca shares stand with a YTD return of nearly -1 per cent.
AstraZeneca Plc shares (YTD scale)
(Source: EODHD/Others, Thomson Reuters)
AstraZeneca-Alexion deal
Both the companies have entered into an arrangement under which AstraZeneca has agreed to acquire Alexion for a consideration of $39 billion or $175 per share. According to the details of agreement, the shareholders of Alexion are entitled to receive $60 in cash and a fractional component of AstraZeneca’s American Depositary Shares equivalent to 2.1243 ADS.
Notably, the acquisition of Alexion has been approved by the boards of both the companies in a unanimous vote and the deal is now subject to the regulatory clearance and approval from the shareholders. Alexion shareholders will be accredited to own nearly 15 per cent of the amalgamated enterprise upon the completion of the buyout, which is expected to be finalised in the third quarter of 2021.
