AstraZeneca rejects new Pfizer bid

Monday 19 May 2014

AstraZeneca has rejected a final £69 billion takeover offer from US drugs giant Pfizer, saying it undervalued the company.

The UK-based pharmaceuticals firm spurned the latest advance from the Viagra maker after it upped the price it was prepared to pay over the weekend. AstraZeneca said the deal would bring "uncertainty and risk" for its shareholders and "undervalues the company and its attractive prospects".

Chairman Leif Johansson 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 minimisation." He said that from the time of initial talks in January, the US company had "failed to make a compelling strategic, business or value case".

Astra for the first time placed a figure on a value it might have been able to consider putting to its shareholders to recommend a sale - of about £74.3 billion, nearly £5 billion above the £69.4 billion final offer from Pfizer. It came after a weekend of talks involving Mr Johannson, his chief executive Pascal Soriot and finance director Marc Dunoyer after Pfizer made an offer of £53.50 a share for the UK-based group. This was increased to £55 a share by Sunday evening but was again rejected today.

Mr Johansson said that in response to the Friday offer, it had indicated that "even assuming that other key aspects of the proposal had been satisfactory" that the price at which it would have been prepared to recommend a sale would be more than 10% higher.

He added: "The final proposal is a minor improvement which continues to fall short of the board's view of value and has been rejected."

Mr Johansson said Astra had created a "culture of innovation, with science at the heart of its operations".

He reiterated widely expressed concerns that a deal would have "serious consequences for the company, our employees and the life sciences sector in the UK, Sweden and the US".