AstraZeneca shares slide 11% as UK firm rejects Pfizer’s “final” offer

19th May 2014

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AstraZeneca was the steepest faller on the FTSE 100 today losing 11% after it confirmed it had rejected Pfizer’s final attempt to secure a takeover.

By market close, shares in the British pharmaceutical group had shed 536p to finish the day at 4,287.5p. The blue-chip index closed 11.26 points down at 6,844.55.

But despite the slide in the value of the stock it remains 28% up over the past month as a result of the excitement generated by the potential deal. The broker consensus on the stock remains a ‘hold’.

This morning, AstraZeneca confirmed it had turned down Pfizer’s latest and final salvo. After weekend talks between the two firms, the US group hiked its offer to £55 per share, valuing the potential deal at £69bn.

But AstraZeneca, which employs almost 7,000 workers in the UK threw it aside and said the offer “falls short” of its 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.

The proposed deal has been heavily criticized with unions and politicians warning that any deal struck could result in heavy job losses despite Pfizer’s arguments to the contrary. A more benign UK tax environment was also said to be a primary motivation for Pfizer’s desire to secure an agreement.

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.”

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