19th May 2014 07:08
LONDON (Alliance News) - AstraZeneca PLC Monday rejected a final GBP69 billion takeover proposal from Pfizer Inc, potentially ending the US company's interest in its British rival for the time being after Pfizer pledged not to go direct to AstraZeneca's shareholders with a hostile offer.
Pfizer raised its approach to GBP55.00 a share, from GBP50.00 previously, and also sweetened the proposed cash and shares deal with a higher cash component. However, AstraZeneca said it still felt that undervalued the company. It left the door ajar for an improved bid from the US drugs giant, saying that it might be prepared to recommend a bid that was more than 10% above the new proposal.
"Pascal Soriot, Marc Dunoyer and I had a lengthy discussion with Pfizer over the weekend about the proposal Pfizer made on Friday evening," AstraZeneca Chairman Leif Johansson said in a statement.
"Pfizer's approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation. From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case. The board is firm in its conviction as to the appropriate terms to recommend to shareholders," Johansson said.
Pfizer urged AstraZeneca shareholders to put pressure on the British company's board to start talks with Pfizer ahead of a May 26 deadline by which the US company must make a firm offer or walk away.
The US company said that under the raised offer, AstraZeneca shareholders would receive 1.747 shares in the combined entity and 2,476 pence in cash. It raised the cash consideration by GBP8.78 per AstraZeneca share, or approximately GBP11.3 billion, meaning its about 45% of the total offer, up from 33% previously.
"Pfizer will not make a hostile offer directly to AstraZeneca shareholders and will only announce an offer with the recommendation of the AstraZeneca board," the US company said in its statement.
AstraZeneca shares fell sharply at the open Monday and were down 12.8% at 4,211.5 pence.
By Steve McGrath; [email protected]; @SteveMcGrath1
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