Pfizer Inc. Is Kicking The Tires At Actavis PLC

Pfizer Inc. (NYSE: PFE) is interested in buying Actavis PLC (NYSE: ACT), according to unnamed sources cited by Bloomberg news service.

Pfizer, whose share price is down more than 6 percent since March, could engineer a tax inversion by acquiring Ireland-based Actavis.

AstraZeneca plc (NYSE: AZN) spurned a $114 billion offer from Pfizer earlier this year in a deal that would have offered Pfizer similar tax benefits.

JP Morgan's Chris Schott said recently that an acquisition by Pfizer looked "increasingly likely" and cited Actavis as among potential candidates. While offering fewer potential products compared with AstraZeneca, "Actavis would be a lower risk, equally compelling transaction for Pfizer," Schott said in a note last week.

"An acquisition of Actavis would likely allow Pfizer to redomicile outside the U.S." Schott said.

Pfizer hasn't made an offer for Actavis and current talks are informal, according to Bloomberg, which said Pfizer is still considering whether to to make another offer for AstraZeneca.

Schott said he wouldn't be surprised if Pfizer resumes talks with AstraZeneca "at some point in the future."

AstrazZeneca shares fell nearly 5 percent Tuesday afternoon; Pfizer lost 0.4 percent.