AstraZeneca rejects improved Pfizer offer
Advises shareholders to take no action
AstraZeneca has rejected Pfizer's improved takeover bid following a meeting of its Board.
Within hours of receiving a raised offer of £50 a share, the Anglo-Swedish pharmaceutical company said the new terms offered were 'inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer'.
AstraZeneca strongly advised shareholders to take no action.
Leif Johansson, Chairman of AstraZeneca, said Pfizer’s proposal 'would dramatically dilute AstraZeneca shareholders’ exposure to our unique pipeline and would create risks around its delivery. As such, the Board has no hesitation in rejecting the proposal.'
US pharmaceutical company Pfizer raised its offer this morning (2 May) for AstraZeneca to £50 a share, valuing the UK firm at £63bn.
Pfizer's initial offer made in January was £46.61 a share, valuing its smaller rival at £60m, which AstraZeneca rejected.
The company also sent a letter to UK Prime Minister David Cameron to try to address concerns over the bid.
Pfizer told Cameron that it was committed to establishing the combined company's corporate and tax residence in England. It said it would also go ahead with AstraZeneca's planned research and development headquarters in Cambridge, scheduled to be completed in 2016, and retain manufacturing facilities in Macclesfield.
Pfizer also said that 20% of the combined company's R&D workforce would be based in the UK if the deal went ahead.
The US company said these commitments would be valid for five years unless circumstances changed significantly.
Pfizer said 20% of the combined company's R&D workforce would be based in the UK if the deal goes ahead
Pfizer's approach has raised fears of job cuts in the UK. The US company's closure of the bulk of its research centre at Sandwich in Kent, where Viagra was developed, led to 1,500 job losses.
The US company kept 700 scientists in Sandwich, who develop cancer and other medicines, as well as 160 researchers in Cambridge working on pain, sensory and regenerative treatments, and 300 people at a packaging site in Havant near Portsmouth.
AstraZeneca employs about 6,700 people in the UK out of 50,000 worldwide.
Pfizer said it hopes that the increased proposal 'will provide the basis for AstraZeneca to enter into discussions relating to a possible combination of the two companies'.
The company said its Chairman and CEO Ian Read contacted AstraZeneca’s Chairman Leif Johansson prior to announcing the increased offer.
According to Read, there is a 'highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies'.
