Shares in drugmaker AstraZeneca have climbed more than 7 percent this week, fueled by speculation of renewed takeover interest from Pfizer, following an abortive $118 billion (71 billion pounds) takeover attempt in May.
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But while British takeover rules mean deal talks could be back on the cards as early as Aug. 26, following the ending of the first of a two-stage cooling-off period, many investors and analysts see the year-end as a more likely time for any return.
"I'm not expecting anything next week," said Dan Mahony, a fund manager at Polar Capital, who increased his stake in AstraZeneca last year. "I know the stock is rallying on anticipation but I suspect if anything is going to happen it is more likely to happen in November or December."
Pfizer Chief Executive Ian Read has made clear he is still considering big deals to revive his firm's pipeline and cut its tax bill - something buying AstraZeneca would allow it to do via a so-called inversion that would shift its tax base to Britain.
However, Read has little leverage right now. Pfizer cannot take the initiative and launch a public bid until Nov. 26 - six months from when it walked away after AstraZeneca rejected its last offer - though AstraZeneca can invite it back from Aug. 26.
British rules also allow Pfizer to make a single offer via a private phone call to AstraZeneca. But this single offer option is rarely used in takeover situations as the bidder has no way to take things further if the target simply says "no".
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As a result, Pfizer would need to make a knockout offer at a big premium to its last bid of 55 pounds a share, which many analysts view as unlikely given Read's reluctance to close the gap in May to the 58.85 pounds AstraZeneca indicated it wanted.
CANCER DRUG HOPES
The one factor that could force AstraZeneca CEO Pascal Soriot back to the table this month would be sustained pressure from his shareholders, a number of whom are disgruntled that he let Pfizer's offer slip away.
Yet there has been no high-profile investor rebellion so far - and Soriot has been steadily building up hopes for his company's new cancer drugs, adding respiratory medicines through a deal with Almirall and putting behind him a damaging U.S. investigation into heart drug Brilinta.
AstraZeneca aims to present more convincing evidence for its experimental medicines at a cancer conference in Madrid in late September, and Soriot intends to highlight the potential of the full line-up of new drugs at an investor day on Nov. 18.
The decision to time that investor event just one week before Pfizer has a free hand to renew its approaches suggests AstraZeneca is "very unlikely" to invite Pfizer to make a new offer once the three-month cooling off period ends next week, according to analysts at Jefferies.
Political uncertainty has also played into the British group's hands to some extent, with recent U.S. threats to clamp down on tax inversions provoking fears that such tax-saving deals may in future be blocked.
Following the failure to buy AstraZeneca in May, healthcare bankers says Pfizer has been looking at other targets.
Ireland-based Actavis would represent one good alternative, according to analysts at Leerink, and Berenberg believes Pfizer could even contemplate buying AstraZeneca's larger British rival GlaxoSmithKline.
But neither offers as good a fit as AstraZeneca, whose pipeline of immune system-boosting cancer drugs would complement Pfizer's currently narrow oncology portfolio.
AstraZeneca shares were 2.2 percent high at 43.79 pounds by 1.50 p.m. BST, outperforming a 0.6 percent gain in the European drugs sector.