Skip to main content

AstraZeneca rejects Pfizer's take-it-or-leave-it offer

Britain's AstraZeneca on Monday rejected a sweetened and "final" offer from Pfizer, puncturing the U.S. drugmaker's plan for a merger to create the world's biggest pharmaceuticals group.

The rebuff came nine hours after Pfizer said on Sunday night it had raised its takeover offer to 55 pounds a share, or around 70 billion pounds ($118 billion) in total, and would walk away if AstraZeneca did not accept it.

The rejection left some major shareholders fuming as shares in AstraZeneca slumped 11 percent to close at 42.88 pounds after falling as much as 15 percent - their biggest ever intra-day decline. Pfizer rose 1 percent in New York.

AstraZeneca Chairman Leif Johansson told Reuters he now saw no prospect of a deal with Pfizer before a deadline of May 26 set under British takeover rules, or any likelihood of that deadline being extended.

Experts also said Pfizer had left itself no room to return with a last-minute higher offer due to the strict takeover code.

Pfizer wants to create the world's largest drugs firm, with a headquarters in New York but a tax base in Britain, where corporate tax rates are lower than in the United States. The plan has met entrenched opposition from AstraZeneca, as well as politicians and scientists who fear cuts to jobs and research.

"It died of multiple wounds. Too little cash, too many suspicions about Pfizer's motives, and too little confidence in its assurances about jobs," said Erik Gordon, professor at the University of Michigan's Ross School of Business. "Pfizer's chances are going down, despite its offer of a higher price."

Johansson said he had made clear in discussions with Pfizer that his board could only recommend a bid that was more than 10 percent above an offer of 53.50 pounds made by Pfizer on Friday, which would amount to at least 58.85 pounds. He blamed Pfizer for calling a halt to discussions after a telephone call lasting more than an hour with Pfizer's chairman and CEO Ian Read on Sunday afternoon.

In addition to the inadequate price, Johansson also slammed what he said was a lack of industrial logic behind Pfizer's move; the risks posed to shareholders by the controversial tax plans; and the threat to life science jobs in Britain, Sweden and the United States.

"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," Johansson said in a statement.

"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."

But many of Johansson's shareholders were deeply unimpressed. "We do not think the Astra management have done a good job on behalf of shareholders," said one fund manager at a top-10 investor in the group.

Alastair Gunn of top-30 shareholder Jupiter Fund Management said: "We are disappointed the board of AstraZeneca has rejected Pfizer's latest offer so categorically. They should have at least engaged in a constructive conversation with Pfizer."

However, Pfizer's proposed takeover, which would be the largest-ever foreign acquisition of a British company, is opposed by many scientists and politicians who fear it would undermine Britain's science base.

The U.S. group said its new offer was final and could not be increased. It said it would not make a hostile offer directly to AstraZeneca shareholders and would only proceed with an offer with the recommendation of the AstraZeneca board.

Pfizer had also increased the cash element in its offer to 45 percent, under which AstraZeneca shareholders would get 1.747 shares in the enlarged company for each of their AstraZeneca shares and 24.76 pounds in cash.

_0">

The new offer represents a 15-percent premium over the current value of a cash-and-share approach made on May 2 - worth 50 pounds a share at the time - which was also swiftly rejected by AstraZeneca.

_1">

Pfizer's Read said he believed his proposal was "compelling" for AstraZeneca shareholders and expressed frustration at its refusal to talk, urging the British company's shareholders to pressure its board to engage.

_2">

TAKE A BREAK

_3">

In the absence of further discussions or an extension of the deadline for making a firm offer under British takeover rules, Pfizer's proposal will expire at 5 p.m. (1600 GMT) on May 26. After that, it would have to wait six months before making another bid.

_4">

"AstraZeneca will have six months to demonstrate that it was right to reject Pfizer's offer, or face the prospect of a fresh approach," said analyst Mick Cooper at Edison Investment Research.

_5">

While Pfizer would have to wait on the sidelines until November, it would be possible for AstraZeneca to initiate talks from late August, if it decided it wants coax a higher offer.

_6">

The latest increased offer had been widely expected. Pfizer said last week it would consider a higher offer as it urged AstraZeneca's board to enter talks.

_7">

The British firm has laid out details of its pipeline of new drugs and argues it has no need for a deal. However, many analysts believe its projections that it can increase sales by 75 percent to $45 billion a year by 2023 are over-optimistic.

_8">

There has been a mounting political backlash against the proposed deal in Britain, the United States and Sweden, where AstraZeneca has half its roots.

_9">

The Swedish government launched a concerted effort on Friday against a merger that it fears will lead to cuts in science jobs and research, echoing concerns aired by British lawmakers at two parliamentary hearings last week, and fears for U.S. jobs in states where AstraZeneca has a large presence.

_10">

British Prime Minister David Cameron has said he wanted more assurances from Pfizer, in the event of a takeover, although as the head of the free-market Conservative Party he does not want to be seen to be deterring foreign corporate investment.

_11">

Pfizer gave a five-year commitment to complete AstraZeneca's new research centre in Cambridge, retain a factory in northern England and put a fifth of its research staff in Britain, but added that these pledges could be adjusted if circumstances changed "significantly".

_12">

The tax aspects of the deal, meanwhile, have sparked anger in the United States, where lawmakers are now considering legislation to prevent what are known as corporate inversions, under which U.S. companies re-incorporate overseas to avoid U.S. taxes.

_13">

Inversions have helped fuel a wave of deals in the pharmaceuticals sector in recent months. Buying AstraZeneca would allow Pfizer to carry out the largest such deal yet.

_14">

(Additional reporting by Chris Vellacott, Jemima Kelly, Kate Holton and Anjuli Davies in London; Editing by Eric Walsh, David Holmes, Alastair Macdonald and Philippa Fletcher)

_15">

Popular posts from this blog

Study Abroad USA, College of Charleston, Popular Courses, Alumni

Thinking for Study Abroad USA. School of Charleston, the wonderful grounds is situated in the actual middle of a verifiable city - Charleston. Get snatched up by the wonderful and customary engineering, beautiful pathways, or look at the advanced steel and glass building which houses the School of Business. The grounds additionally gives students simple admittance to a few major tech organizations like Amazon's CreateSpace, Google, TwitPic, and so on. The school offers students nearby as well as off-grounds convenience going from completely outfitted home lobbies to memorable homes. It is prepared to offer different types of assistance and facilities like clubs, associations, sporting exercises, support administrations, etc. To put it plainly, the school grounds is rising with energy and there will never be a dull second for students at the College of Charleston. Concentrate on Abroad USA is improving and remunerating for your future. The energetic grounds likewise houses various

Best MBA Online Colleges in the USA

“Opportunities never open, instead we create them for us”. Beginning with this amazing saying, let’s unbox today’s knowledge. Love Business and marketing? Want to make a high-paid career in business administration? Well, if yes, then mate, we have got you something amazing to do!   We all imagine an effortless future with a cozy house and a laptop. Well, well! You can make this happen. Today, with this guide, we will be exploring some of the top-notch online MBA universities and institutes in the USA. Let’s get started! Why learn Online MBA from the USA? Access to More Options This online era has given a second chance to children who want to reflect on their careers while managing their hectic schedules. In this, the internet has played a very crucial in rejuvenating schools, institutes, and colleges to give the best education to students across the globe. Graduating with Less Debt Regular classes from high reputed institutes often charge heavy tuition fees. However onl

Sickening moment maskless 'Karen' COUGHS in the face of grocery store customer, then claims she doesn't have to wear a mask because she 'isn't sick'

A woman was captured on camera following a customer through a supermarket as she coughs on her after claiming she does not need a mask because she is not sick.  Video of the incident, which has garnered hundreds of thousands of views on Twitter alone, allegedly took place in a Su per Saver in Lincoln, Nebraska according to Twitter user @davenewworld_2. In it, an unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of the customer recording her. Scroll down for video An unidentified woman was captured dramatically coughing as she smiles saying 'Excuse me! I'm coming through' in the direction of a woman recording her A woman was captured on camera following a customer as she coughs on her in a supermarket without a mask on claiming she does not need one because she is not sick @chaiteabugz #karen #covid #karens #karensgonewild #karensalert #masks we were just wearing a mask at the store. ¿ o