Tuesday - May 23, 2017

AstraZeneca turns their back on Pfizer’s “final” £69 billion takeover bid


AstraZeneca turns their back on Pfizer’s “final” £69 billion takeover bid

The British-Swedish multinational pharmaceutical and biologic company AstraZeneca continued to batten down the hatches against what now appears to be a hostile takeover bid from US-based pharmaceutical giant Pfizer.

AstraZeneca, once again rejected their takeover approach, this time refusing a £69 billion bid, which Pfizer has claimed to be the final offer to acquire the company, and would discontinue all communication if their improved bid was refused.

In response Leif Johansson, chairman of AstraZeneca explained to the press that Pfizer once again “failed to make a compelling strategic, business or value case” for acquiring the company, which would have been (and may still be) the largest takeover of any UK company from an overseas concern.

Previously, a spokesperson for Pfizer had categorically stated that the company were not interested in a hostile bid, instead urging AstraZeneca shareholders to place pressure on the company’s management to at least enter into advanced negotiations over their £55 per share proposal.

Industry analysts now assert that the lack of progress in the talks and their increasingly likely collapse have put an end to Pfizer’s plans to create the world’s largest pharmaceuticals group in terms of sales.

When asked in a recent interview whether the AstraZeneca board were likely to enter into any form of negotiation with Pfizer, chairman Johansson hastily replied that the company has investigated considerable time and effort engaging with Pfizer, yet remain confident of having developed independent strategy that will deliver a better proposition to the company’s shareholders, was going on to add that Pfizer’s final offer undervalued AstraZeneca whilst at the same time feeling to address a number of important concerns the board had about the proposed deal.

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, Mr. Johansson summed up.

Perching fairly high up on a branch of their own making, having both declared that their most recent offer was final as well as ruling out all prospects of a hostile bid, Pfizer’s last chance of acquiring AstraZeneca can only rest on the hopes of a substantial shareholder rebellion against the firm stance adopted by the company’s board.

Apparently, some of AstraZeneca’s major shareholders have been hinting to U.K.’s leading financial press in the last few days days that they could be interested in accepting a Pfizer’s offer of around £55 per share, a distinct improvement on the £50 per share initial offer which AstraZeneca turned down on in early May; which was reportedly later topped by an improved proposal of £53.50 a share, with 40 per cent of it in cash before last weekend.

Apparently, during lengthy but unofficial discussions held between representatives of AstraZeneca and Pfizer over the weekend, a clearer picture began to emerge, where Lief Johansson hinted strongly that an an increase of ten per cent in size Pfizer’s offer could be enough to clinch the deal, placing a value on the company shares of over £60.

At the moment AstraZeneca’s shares are not looking at all healthy, dropping by close to 15% in early trade on the London stock exchange, and currently sitting somewhere in the early £40 per share bracket.

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