19th May 2014
British drugs firm AstraZeneca has rejected Pfizer’s “final” takeover bid which saw the US group up its offer to £55 per share valuing the potential deal at £69bn.
After lengthy discussions with Pfizer over the weekend, the US firm made its last approach on Sunday but the UK group said this morning that the proposal “falls short” of AstraZeneca’s value as an independent science-led company and that the deal would bring uncertainty and risks for shareholders.
Pfizer has confirmed its improved proposal is final and cannot be increased.
Pfizer’s approach has been heavily criticized by unions and politicians who have argued that the takeover would put AstraZeneca’s near 7,000 UK employees jobs at risk and that the primary motivation behind the approach has been to shift the business to a more tax-friendly environment.
If Pfizer had been successful, it would have seen the US drugs giant create the world’s largest pharmaceutical corporation, which would have been headquartered in New York but listed in the UK.
Leif Johansson, chairman of AstraZeneca said: “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 minimization.
“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 asserted that AstraZeneca’s “culture of innovation, with science at the heart of its operations” will continue to create significant value for patients and shareholders.
“We have rejected Pfizer’s final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, our employees and the life-sciences sector in the UK, Sweden and the US,” he added.
Pfizer has said it will not make a hostile offer directly to shareholders and would only announce an offer with the recommendation of the AstraZeneca board.
Pfizer’s play for AstraZeneca over the past month has proved a boon for the FTSE 100 listed group’s stock which has soared by 28% over the period.