Pfizer, eyeing German generic drug maker Stada after losing the battle for Ratiopharm, would have to pay top dollar to unpick management's lock on Stada's shares.

To repel suitors, Stada has a type of stock that under German securities trading laws can only change hands with the consent of top managers.

So-called "vinculated" shares - from the Latin for fettered or bound - also protect German blue chips such as Deutsche Lufthansa and Allianz from unsolicited approaches.

Even before Israel's Teva outbid Pfizer by more than €100 million in the €3.7 billion Ratiopharm deal, the U.S. drug industry leader had cast an eye on Ratiopharm's closest rival, Stada, sources had said.

Two sources familiar with Pfizer's thinking told Reuters on Friday the U.S. company was highly unlikely to make anything but a friendly approach.

Stada, formerly a procurement cooperative for pharmacists which still counts many of them among its shareholders, was not amenable to losing its independence, other sources said.

That means Pfizer would have to pay a hefty premium to win over management.

Stada, which declined comment, had until the Teva deal vied with Ratiopharm for second place among Germany's generics makers, trailing Novartis's Hexal business.

Pfizer declined to comment.

Talk Of Approaches
"In theory, Stada's management could block any takeover attempt," Commerzbank analyst Daniel Wendorff said. "But in the end, it will be a matter of making a bid that's high enough to make it impossible for the company to justify their opposition to Stada shareholders."

Based on multiples from the Ratiopharm deal and on Wendorff's 2010 core earnings estimates, the Ratiopharm metrics would translate into a Stada takeover price of €42.5 per share, a premium of more than 40% over the market price.

That price, equivalent to a takeover offer of about €2.5 billion euros for Stada - €3.5 billion including debt -would most likely be enough to win over management, he added.

"The trading restrictions on these kinds of shares first of all require a monetary premium," said a lawyer who advises overseas investors eyeing Germany. He asked not to be named.

"It's a feature that needs to be explained to U.S. investors. You need to develop elaborate strategies to get management approval," he added.

Analysts said speculation was rife that Stada will have to contend with approaches, friendly or otherwise, after Teva and rival bidder Actavis of Iceland emerged runners-up in the Ratiopharm auction.

"Stada could now become the top takeover target for the losers of the bidding race: Actavis and Pfizer," DZ Bank analyst Thomas Maul wrote in a note.

Pfizer is more bullish on its prospects for revenue in 2012 than Wall Street is, indicating that acquisitions are in the offing, analysts have said.

Pfizer in January said it was targeting revenue of $66 billion to $68.5 billion in 2012, while analysts project $61.8 billion, according to Thomson Reuters I/B/E/S.