S&P removes Wyeth from indices before acquisition

TRENTON, N.J. – In the latest sign that Pfizer Inc.’s $68 billion purchase of Wyeth will go through, Wyeth’s stock has been removed from two key investor indices.

Credit ratings agency Standard & Poor’s has removed Wyeth shares from both the S&P 500 and the S&P 100 indices, replacing the company with First Solar Inc. and News Corp., respectively.

The move Thursday comes after regulators in China and then Australia this week approved the deal, the biggest of three mega mergers in the pharmaceuticals industry this year.

“The fact that S&P is pulling Wyeth out is indication that the deal should close, which should make arbitrage people happy,” Miller Tabak & Co. analyst Les Funtleyder said Friday.

Arbitrageurs are investors who buy shares of a company targeted for acquisition when a deal is announced, gambling they’ll make the difference between the announced purchase price and the price of the stock when they buy it. If a deal falls through, as when regulators or shareholders reject it, arbitrageurs stand to lose money.

On Jan. 26, Pfizer said it would pay $50.19 per share for Wyeth, a 14.7 percent premium to Wyeth’s prior closing price of $43.74. This week, Wyeth shares have been trading above $48; they were up 6 cents at $48.32 Friday morning. Pfizer shares were down 8 cents at $16.23.

New York-based Pfizer, the world’s biggest drugmaker by revenue, and No. 13 Wyeth of Madison, N.J., still need approval of the deal from the U.S. and Canada, but have already concluded other key steps, including getting approval in July from Wyeth shareholders.

The companies have said they expect the deal to close early in the fourth quarter. Pfizer, the maker of cholesterol fighter Lipitor and impotence pill Viagra, is set to announce its third-quarter financial results on Oct. 20. Wyeth, the maker of antidepressant Effexor and children’s pneumococcal vaccine Prevnar, has not announced a date to release its results, another sign closing of the deal is imminent.