UK rival rejects ‘final’ offer from Pfizer
Print Edition
BRITAIN’S AstraZeneca yesterday rejected a sweetened and “final” offer from Pfizer, undermining the US drugmaker’s plan for a merger to create the world’s biggest pharmaceuticals group.
The rebuff came nine hours after Pfizer said on Sunday it had raised its takeover offer to 55 pounds a share, or around 70 billion pounds (US$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 after falling as much as 15 percent — their biggest-ever intraday decline.
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.”
AstraZeneca Chairman Leif Johansson said he had made clear in discussions with Pfizer that his board could only recommend a bid that was at least 10 percent above an offer of 53.50 pounds made by Pfizer on Friday, or 58.85 pounds.
In addition to the inadequate price, Johansson also slammed the 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 US.
“From our first meeting in January to our latest discussion yesterday (Sunday), and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case,” Johansson said.
Johansson’s refusal to engage in discussions angered some shareholders, with one fund manager at a top-10 investor in the group saying: “We do not think the Astra management have done a good job on behalf of shareholders.
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 would be the largest-ever foreign acquisition of a British company and is opposed by many scientists and politicians who fear it would undermine Britain’s science base.
The US group said its new offer was final and could not be increased.
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