Finance

MARKET REPORT: AstraZeneca sinks as rumours fly that boss Pascal Soriot is set to quit for an Israeli rival

Rumours that AstraZeneca chief executive Pascal Soriot is about to jump ship and head to an Israeli rival yesterday led investors to fear the drug maker could become open to another takeover bid.

Investors fled after an Israeli newspaper reported that Soriot has met Teva, the world’s largest generic drug maker, where he could earn twice as much as the firm’s former boss and a signing-on bonus of up to £17.6million.

The City’s concern is that Soriot’s departure will damage expectations for Astra’s drug pipeline and critical upcoming lung-cancer drug trial, which is seen as a key test of the boss’s research-heavy investment strategy.

Soriot, who trained as a vet and was paid £13.4million in 2016, has led the Anglo-Swedish firm since 2012, during which time he has committed to reinvigorating the firm’s research and development pipeline over ten years.

Target: AstraZeneca boss Pascal Soriot is wanted by Israeli generics giant Teva who have reportedly offered n eye-watering pay deal

Any uncertainty around Astra’s pipeline could once again make it an acquisition target for fellow drug giant Pfizer, which failed in a highly controversial £70billion takeover bid in 2014.

Both AstraZeneca and Teva declined to comment. Astra’s shares fell 3.5 per cent, or 179p, to 5013p.

Carillion saw shares rise by more than 10 per cent in early trading – a nice break from a brutal sell-off this week which has seen more than 70 per cent knocked off the firm’s share price following a profit warning.

But shares soon sank back into the red after Oxfordshire County Council ended a ten-year deal to build schools and supply property management services, which was expected to be worth £500million.

Shares in the construction firm fell 3.1 per cent, or 1.75p, to 55.45p.

Tech investor Mercia invested £2million in a leading virtual reality gaming firm.

The FTSE 100 saw a flat day of trading despite gains among retailers, falling by 0.1 per cent, or 3.49 points, to 7413.44.

After spending all week getting bruised by analysts over its botched sale of a stake in Penguin Random House, textbook publisher Pearson was dealt another blow from Liberum yesterday, after the broker reiterated its ‘sell’ rating and gave the firm a 360p target price.

It said an 11.5pc drop in US college book operator Barnes and Noble Education’s stocks, on the back of poor results, highlighted long-standing ‘structural challenges’ in Pearson’s US business. Shares rose 0.8 per cent, or 5p, to 629p.

Engineer Babcock International continued to trade near four-year lows, despite a strong update, as investors displayed caution towards new chief executive Archie Bethel.

Even though trading is in line with expectations and around 82 per cent of next year’s revenue is already booked, Bethel, who took over from long-standing boss Peter Rogers last August, still failed to win over punters.

Shares fell 1.4 per cent, or 12.5p, to 857p.

Premier Oil followed its discovery of 1bn barrels of oil in Mexico earlier this week with a stellar set of results.

It said oil production had increased 34.5 per cent year-on-year in the first six months, while debt and operating costs dropped.

But the results were largely priced in by the market already, and shares dropped by 0.4 per cent, or 0.3p, to 62.25p.

Exhibition and conference group ITE Group scaled the small cap index after revealing a 9 per cent like-for-like increase in revenues to around £58million, boosted by strong activity in Moscow.

Shares hit their highest level since May, rising 7.9 per cent, or 12p, to 164p.

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