NEW YORK (TheStreet) -- Zoetis (ZTS) shares are down 9% to $50.43 in early market trading on Friday after the animal health medicine developer received a takeover bid from Canadian drug maker Valeant Pharmaceuticals (VRX), according to the Wall Street Journal.
Zoetis was spun off from Pfizer (PFE) in 2013 and has a current market value of approximately $25 billion.
Valeant Pharmaceuticals has been active in acquisitions in recent months and closed an $11 billion acquisition of Salix Pharmaceuticals in March.
Analysts have pegged the company as a potential takeover target since activist investor William Ackman took an 8% stake in the company last November, according to the Journal.
Valeant shares are down 1.25% to $230.29.
Insight from TheStreet research team
Zoetis was the subject of a Real Money Pro article entitled 'Weekly Bull Chart: Zoetis' in late May. Here is what analyst Timothy Collins had to say about the stock.
The stock is now above the resistance levels from a channel that trades back through November of last year. This week the expectations would be for a close over $49, which allows for a little downside, for Zoetis to remain a buy. If I were a buyer Monday, and I likely will be, then my yellow flag is $49 and my stop is $48. If we close under $49 there is a good chance we'll trade back in the channel. But given the overall market could falter I'm willing to give the stock down to $48. This still would not retrace the entire move of the last week.
But it isn't just about price. The technical setup for Zoetis is strong as well. The setup here is complex, but it isn't the first time that we've seen it. We have a rising RSI that bounced off the 50 midline recently, remaining in bullish territory. Furthermore, the slow stochastics just did a similar bounce and encompassed a bullish crossover along with it. Both momentum and trend are strengthening again here along with price. Then, we add in the Force Index moving back into bullish (green territory) and we can now include the price-volume relationship in our bullish thesis. But we're not done yet. Price has now broken above the upper bollinger band creating a potential breakout from a short-term volatility squeeze. Price plus volume plus momentum plus trend plus volatility equals very strong buy.
-Timothy Collins, 'Weekly Bull Chart: Zoetis', 5/31/2015