FORTUNE — AstraZeneca’s shares gained almost 1% Thursday on speculation that Pfizer may sweeten its acquisition offer to $113 billion this weekend, Reuters reported.
The 7% increase by Pfizer from its $106 billion offer last week would still make for a reasonable price, said Seamus Fernandez, an analyst with Leerink Partners. Pfizer (PFE) made an initial bid for AstraZeneca (AZN) in January for $98.7 billion in hopes of creating an even bigger pharmaceutical giant. It then followed up with a sweetened offer four months later. Both offers were rejected.
Pfizer, which has a market capitalization of over $186 billion, could create value with a bid as high as $115 billion if the company completes the acquisition with a mix of half-cash, half-stock, cashes in on some tax benefits, and cuts up to $6 billion in costs, Fernandez said.
“Strategically, the overlap is very compelling, although in this case, AstraZeneca holds all the cards,” he said. “So, Pfizer definitely has to sweeten the pot if they want to get this done.”
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AstraZeneca’s board rejected last week’s proposal, saying that the bid undervalued the company’s research and development pipeline. AstraZeneca CEO Pascal Soriot said annual sales could reach more than $45 billion within a decade when its medicines in development go to market. That would be almost twice as much as last year’s sales.
Soriot is meeting with its top shareholders to get their feedback, and he has yet to discount a deal altogether. People who are close to the deal told Reuters that AstraZeneca would consider talks if a compelling offer arises.
If the deal goes forward, it would be the biggest ever foreign purchase of a British company. CEO Ian Read is set to present his plans for the potential takeover next Tuesday to British lawmakers, who have been critical of the deal. Many want stronger promises from the U.S. drug maker that they will protect UK jobs and maintain local research and development facilities.
Read has made previous promises to maintain an innovation complex in Cambridge and keep 20% of the combined company’s total R&D workforce in the UK, saying that “the ‘golden triangle’ of Oxford, Cambridge, and London would represent a vital component” of the combined company.
