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Astrazeneca declines record £58.8B (US$99B) offer from Pfizer

By Nuala Moran, Staff Writer

LONDON – Pfizer Inc has confirmed it wants to buy Astrazeneca plc and that it made a renewed approach on Saturday to see if terms can be agreed on a bid at a 30 percent premium to £37.81, (US$63.68) the closing price on April 17, before news of an earlier approach to buy the London-based pharma was made public.

At £58.8 billion this would be the largest foreign takeover of a UK firm in history. However, for now Astrazeneca has again declined, putting out a statement saying Pfizer, “did not make a specific proposal” but nevertheless requested that both companies issue a joint statement announcing that they had entered into discussions. “The board of Astrazeneca considered this request and concluded that, absent a specific and attractive proposal, it was not appropriate to engage in discussions with Pfizer,” the statement said.

While Pfizer said it would only proceed if Astrazeneca agrees, its statement went over the heads of the board of directors to appeal directly to shareholders, saying the deal would offer “a highly compelling opportunity” to realize a significant premium and give Astrazeneca shareholders significant rights in the combined company.

UK takeover rules mean Pfizer now has until the close of business on May 26 to make a firm offer or drop the offer.

According to the Pfizer statement, Pfizer initially approached Astrazeneca in January with an offer in cash and shares worth £46.61 (US$76.62) per share, a premium of 30 percent to the closing price of £35.86 on 3 January.

The Astrazeneca statement put further detail on the bid, saying it comprised £13.98 in cash (30 percent) and 1.758 Pfizer shares (70 percent) for each Astrazeneca share. In the eyes of the Astrazeneca board this was too much paper and not enough cash.

The proposal involved forming a new U.S. listed and headquartered holding company, though Pfizer also proposed redomiciling in the UK for tax purposes, according to Astrazeneca.

News of the renewed offer again pushed up Astrazeneca shares (AZN:LON), to reach £46.81 in early trading on Monday morning, a rise of 14.74 percent.

The earlier offer, rebuffed on Jan. 14, was made public in the UK media at the start of last week, as deals fever hit the sector, with Glaxosmithkline plc and Novartis AG announcing they are to swop assets valued at $26.65 billion, and Valeant Pharmaceuticals International Inc. making a hostile $45 billion bid for Allergan Inc. 

See Tuesday's BioWorld Today for More on This Story.