Shares in Swiss biotech Actelion (ALIOF) rose sharply in Zurich Friday on a report that it's attracted a bid from Johnson & Johnson JNJ.
Actelion released its short statement after Bloomberg said the New Brunswick, N.J. company had approached the Swiss business with an offer worth about $17 billion. Johnson & Johnson confirmed the discussions midday Friday.
Actelion is led by fiercely independent co-founder Jean-Paul Clozel, who has for years resisted suggestions the company is a target. Other mooted suitors for Actelion over the years have included Shire (SHPG) , which was last year reported to have made a takeover proposal for the business.
Actelion shares by late morning in Zurich were up 10.7% at Sfr174.90. At that price the company's stock is worth Sfr18.8 billion ($18.5 billion). The stock before Friday had risen more than 23% in the past year.
But Actelion shares fell 6% on Oct. 20 when it reported disappointing nine-month figures amid worries about the U.S. outlook. Nine-month revenue was Sfr1.79 billion, up 14% on the year, and net profit was Sfr691 million, up 17%. Both figures strip out exchange-rate fluctuations.
Jeffferies analysts at the time argued that the share reaction was overdone, and said the company is a "compelling growth story," notwithstanding an expected mid-single digit decline in estimated 2017 profit.
Johnson & Johnson closed in New York Wednesday up 33 cents at $113.07. Johnson & Johnson has a market value of $307.6 billion and the stock's 12-month return is 14%.
Shire was up more than 2% on Friday morning in London.