Zeneca holds new Wellcome talks

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Talks took place over the weekend between the pharmaceutical company Zeneca and the Wellcome Trust, which owns 39.5 per cent of Wellcome plc - increasing the chance of a new last-minute offer to top Glaxo's £9bn bid.

Other companies which have been in talks and may still bid are US giants Johnson & Johnson and Pfizer. Switzerland's Roche is also a possible buyer, although it is in the throes of management changes.

Zeneca was by yesterday the leading contender. As well as the weekend's talks with the Wellcome Trust, it has been in direct talks with Wellcome management.

Any new bid will have to be made before Wednesday afternoon as the Trust has already agreed to sell its holding to Glaxo if a higher offer is not tabled before then.

Yesterday Zeneca repeated that it would not comment on market rumour, but the continuing speculation has been fuelled by the refusal of the company's chairman, Sir Denys Henderson, to deny that he was interested in acquiring Wellcome.

Yesterday a spokesperson for Wellcome said: "The board has worked energetically to develop a better offer, and continues to believe that if any such offer were to be made it would be made at the end of the offer period."

Any last minute offer is likely to top £10bn - a sum which would be within Zeneca's means with backing from the banks. Barclays is reported to have worked on a £5bn package to finance the deal. Additional finance for a bid could come from the sale of some of its peripheral businesses, worth up to £3bn, or through a rights issue.

Zeneca, which was demerged from ICI in 1993, has long been interested in Wellcome since last year, and made an unsuccessful offer for the company last year.