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As per the title.

I had a small holding in AZN. I couldn't decide whether to sell or hold when the Pfizer takeover approach was announced. I therefore sold half my stake.

What's the HPC view on the most likely price movement of AZN shares?

please keep the rights/wrongs of the bid to the thread on the main board, I'm just interested in the likely price movement.

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As per the title.

I had a small holding in AZN. I couldn't decide whether to sell or hold when the Pfizer takeover approach was announced. I therefore sold half my stake.

What's the HPC view on the most likely price movement of AZN shares?

please keep the rights/wrongs of the bid to the thread on the main board, I'm just interested in the likely price movement.

I, like most people I have no idea what the future holds. So first I want to say well done for selling half. It's a sound tactic to sell half your holdings when you have seen a big jump in price and don't know what is going to happen next (unless it houses then people just leverage themselves up to buy 2 or 3 more, as the price of property always goes up, risk free I tells ya :P).

I also pulled the chart up to use my expert charting skills to view far into the future, i.e. I drawn some lines and took a guess. Obviously the price is on the tear with a big gap on the 28th but even at this price the yield is still 3.5%. If the deal falls through (which I don't see happening as its rare for British governments to get involved and DC has already said that they won't) the price will likely fall back and should find some sort of weak support at 4140 and stronger support at around 3670 or 3530. Otherwise the price could increase from here, especially if the bid is increased. What was the bid £50 a share?

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BTW here the AZN chart for the last 15 years. You can see the sideways action and the new breakout at the top of the range. I would put a stop in at about 3150 and sit back and relax.

AZN chart.jpg

post-37194-0-05441200-1399488025_thumb.jpg

Edited by renting til I die

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Thanks for the charts "renting till I die", very interesting. your suggestion of putting a stop on the holding is a good idea, I might see if I can set one up.

Apparently Pfizer approached the AZN board on the 5th January with an offer worth about £46 per share. I think they made a slightly improved offer recently: analyst comment suggests a price of £50 is attainable. Pfizer has until the 26th May to put in another bid so I'm going to sit tight and see what happens. I don't think the price will go much higher, but could fall fast if Pfizer walk away.

The elephant in the room is the involvement of politicians and The Panel on Takeovers and Mergers. If the government, EU or takeover panel decides that the deal is not suitable, then all bets are off.

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Well, in the end Pfizer drifted away and can't bid again for (I think) another six months. The price has fallen back a bit on the news but is still much higher than before the bid was mooted. I have just bought back the half of my stake that I sold, pocketing a small profit after stamp duty and two lots of dealing charges. Not my usual investment style (I tend to buy and hold) but quite fun in its way.

Perhaps Pfizer will return later in the year.

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Around the time of the Pfizer approach I spoke to a pharmacist who knew a few people working at AZN. He painted a bullish picture of its prospects: willing to do R&D in more esoteric areas rather than chasing me-too products, good working environment, morale high. I put them on my watchlist.

More recently I spoke to someone else in the industry (working for a rival, but about to be laid off so probably not an axe to grind) who added a few more details. Nice place to work but pipeline fairly empty, new drug candidates more likely to be bought in than developed in-house. That plus a current ratio of less than 1 mean I've taken them off my watchlist.

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Sigh...I'm kicking myself for not buying at 3800 a few weeks back. Finger hovered, didn't click. At 5000, i'd have been considering selling the stake now for some 'free' astra shares (though I'd normally wait for a 40% gain to do so - i.e. somewhere in the 5300 range).

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Hold.

Big Pharma is starting to emerge from its long nightmare where the big money spinners were falling out of patent. GSK and AZN are both turning the corner with development pipelines that look increasingly attractive.

Neil Woodford is perhaps the most successful UK stock picker and he has no doubt. AZN is his second biggest holding, GSK is his third, and Roche comes in at number nine. Woodford believes Pharma, Tobacco, and one or two others such as BAE and Legal & General, should form the backbone of a long term UK portfolio that will deliver growth, defensive security, and a very attractive and rising yield of over 4%.

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