Friday, October 24, 2014   

AstraZeneca rejects Pfizer's final bid
(05-19 15:46)

British drugs giant AstraZeneca on Monday rejected a final takeover bid from US rival Pfizer worth $117 billion, saying it undervalued the firm.
Pfizer on Sunday made an improved and final offer worth 69 billion pound, pitched at 55 per share, but added that it would not proceed without a recommendation from AstraZeneca's management, AFP reports.
"We have rejected Pfizer's final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, our employees and the life-sciences sector in the UK, Sweden and the US,'' said AstraZeneca chairman Leif Johansson.
Pfizer, which makes Viagra, had on Friday lifted its proposal to 53.50 pounds per share, from the previous level of 50.
However, AstraZeneca declared that it would only be prepared to recommend an offer of more than 10 percent above the 53.50 level, indicating a price of 58.85 pounds or 3.85 pounds more than the latest offer.
"The final proposal is a minor improvement which continues to fall short of the Board's view of value and has been rejected,'' said Johansson.
He added: "As an independent company, the entire value of AstraZeneca's (drugs) pipeline will accrue to our shareholders. Under Pfizer's final proposal, this value would be significantly diluted.''
Under the latest bid, Pfizer shareholders would own approximately 73 percent of the new firm, while the British group's shareholders would hold 27 percent.
AstraZeneca, which has repeatedly snubbed Pfizer's takeover attempt, attacked the bid for offering to establish its corporate and tax residency in England.
Pfizer wants to create a new pharmaceuticals giant which would be domiciled for tax purposes in Britain.
"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,'' added Johansson.
This appeared to be a reference to big tax charges which would fall due on profits held abroad should Pfizer decide to transfer them to the United States.
"From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case, Johansson said.
"The board is firm in its conviction as to the appropriate terms to recommend to shareholders.''   
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