Pfizer's ($PFE) animal health unit may not be to Sanofi's ($SNY) taste, but Bayer and Novartis ($NVS) appear to have an appetite for it. Sources close to the process tell Reuters that Bayer is shopping for debt financing as it mulls a bid for the veterinary unit. Meanwhile, The Wall Street Journal's sources say Novartis actually made an offer--of up to $16 billion--but Pfizer said it was too low.
The animal health business is one of two major units Pfizer has tagged for sale or spinoff. Since CEO Ian Read (photo) announced his intentions for the unit last year, pharma watchers have been handicapping various buyers. Eli Lilly ($LLY) has said it's not looking at a bid, although it might snap up a few assets if sold separately (Pfizer nixed that idea). Sanofi CEO Christopher Viehbacher (photo) reiterated his lack of interest earlier this week.
Bayer, on the other hand, has said from the beginning it might be interested in making an offer. Apparently, the unit is now one of the options CEO Marijn Dekkers is considering as he shops for deals. As Bloomberg notes, it would be Bayer's latest attempt to build up its vet operation after losing out on Schering-Plough's Intervet three years ago.
However, Pfizer is said to be leaning toward a spinoff for tax reasons. Miller Tabak's Les Funtleyder figures the drugmaker will decide whether to sell or spin off based on price. Bayer then might be able to sway Pfizer toward a sale by covering the tax liabilities, Bloomberg points out. And that tax issue may be why Novartis' offer--which, at $16 billion, would fall right into the range analysts have predicted--didn't go anywhere.