Bayer stock up on talk of Novartis interest

Last Wednesday, rumours that Novartis could be offering 70 euros per share boosted Bayer stock by as much as 7 percent.

Bayer declined to comment on the fresh market speculation on Tuesday. Novartis was not immediately available for comment.

Bayer shares were up 3.2 percent at 56.41 euros by 0945 GMT, while Germany's DAX index was down 0.1 percent. Novartis shares were slightly lower.

Analysts have been sceptical that Novartis, with a market value of around $143 billion, would launch an offer for Bayer, worth more than $54 billion at its current share price.

Dresdner Kleinwort analysts said recently that they doubted there was anything behind the rumours.

"Novartis has suffered several setbacks lately and we don't believe the company is in a strong enough position to make a big acquisition now," they said in a note to clients. While both companies are top players in the drug business, Bayer is also a heavyweight in chemicals and plastics and competes with BASF and Dow Chemical.

Bayer, which invented Aspirin more than a century ago, has also boosted its healthcare business with its 17 billion euro acquisition of Schering last year, enabling it to compete more effectively with industry giants.

Bayer is also one of the leading players in agrochemicals with its CropScience unit, which competes with BASF, Syngenta and Monsanto.

(Additional reporting by Mantik Kusjanto in Frankfurt and Sam Cage in Zurich)