20th May 2014 11:11
LONDON (Alliance News) - US drugs giant Pfizer Inc Tuesday confirmed that its current takeover approach to British rival AstraZeneca was effectively over having had its "final" proposal rejected Monday, as under UK takeover rules it will only be able to make another offer in limited circumstances.
AstraZeneca rejected a final GBP69 billion takeover proposal from Pfizer, 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 had 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.
In a statement Tuesday, Pfizer confirmed that under UK takeover rules, it will only be to adjust its current "final" offer if its share price of the dollar/pound exchange rate moves in a way that makes the indicative value of the offer less than GBP55.00 a share at the time of any firm offer. It would only be able to add more cash or shares to the offer to bring it back to GBP55.00 a share, and no higher.
It has also reserved the right to increase its proposal if a third party announces a firm intention to make an offer at a higher price than Pfizer's proposal.
It could also raise its offer if AstraZeneca decides to recommend its "final" proposal.
If Pfizer doesn't make a firm offer by 1700 BST on May 26, it must walk way for at least six months. Analysts say that Pfizer may not ever return for its British rival, as the US government will have by then shut a tax loophole making it beneficial for Pfizer to domicile outside the US after acquiring a foreign company.
AstraZeneca shares were up 0.1% at 4,290 pence Tuesday, having dropped sharply Monday in the wake of its rejection of the Pfizer approach.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Astrazeneca