13th May 2014 05:37
LONDON (Alliance News) - US pharmaceutical giant Pfizer Inc. is planning to raise its bid for British rival AstraZeneca PLC a second time before it considers whether to make a hostile bid, Bloomberg reported Monday, citing people with knowledge of the matter.
According to the Bloomberg report, Pfizer is now exploring a new offer for AstraZeneca that would increase the value modestly above its current bid of 50 pounds per share, while increasing the cash portion of the offer. However, the company will probably wait until after the UK government hearings to raise its bid.
Pfizer's chief executive officer Ian Read and AstraZeneca's CEO Pascal Soriot will testify at two separate parliamentary committees later this week, as the UK government seeks guarantees from Pfizer about preserving jobs and medical research in the UK.
Bloomberg reported that Pfizer would prefer making a friendly offer for AstraZeneca since its bid has attracted political scrutiny in the US and UK The company is said to be putting together a sweetened offer before it considers whether to make a hostile bid by taking its proposal directly to AstraZeneca's shareholders.
According to the Bloomberg report, Pfizer is worried that it beginning to lose momentum on the deal. The company will talk further to investors and wait for the outcome of the hearings at it evaluates its next steps.
In early May, AstraZeneca said its board rejected the sweetened offer from Pfizer of 50 pounds per share and urged its shareholders not to take any action on the bid. Under the revised terms, each AstraZeneca shareholder would receive 1.845 shares in the combined company and 1,598 pence in cash, representing an indicative value of 50 pounds or USD84.47 per share. This compares to Pfizer's earlier offer of 46.61 pounds or USD76.62 per share.
The sweetened offer valued AstraZeneca at 63 billion pounds or USD106 billion. AstraZeneca currently has a market valuation of about USD102 billion.
Pfizer Chairman and CEO Ian Read had sent a letter to British Prime Minister David Cameron, expressing the company's commitment to the UK and its life sciences agenda if the proposed combination with AstraZeneca is completed.
PFE closed Monday's trading at USD29.13, up USD0.10 or 0.34% on a volume of 21.66 million shares. However, in after-hours, the stock declined USD0.01 or 0.03% to USD29.12.
AZN closed the regular trading session at USD77.87, up USD0.63 or 0.82% on a volume of 2.92 million shares. In after-hours, the stock further gained USD1.08 or 1.39% to USD78.95.
Copyright RTT News/dpa-AFX
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