Less than 10 days after CEO Jeffrey Kindler pooh-poohed big acquisitions, U.K. markets are aswirl with rumors that Pfizer is on the hunt for British pharma group Shire. The company's shares leapt this morning on huge trading volume. Never mind the fact that analysts don't think Shire would be a good fit for Pfizer; deal talk has its own psychology. Alan Greenspan might call it irrational exuberance.
Of course, it's not the first time a Pfizer buyout rumor moved markets. Last fall when Biogen Idec went on the block, Pfizer was a rumored suitor; the chattering classes quickly mused that the drugs giant might prefer Genzyme. Frenzied deal talk around the same time linked Pfizer with Sanofi-Aventis and with Wyeth. Why so much speculation? Everyone knows Pfizer has to do something to replace the sales it'll lose when Lipitor goes generic in a few years.