Pfizer Inc. Confirms New Buyout Offer For AstraZeneca plc

Pfizer Inc. Confirms New Buyout Offer For AstraZeneca plc
By Pfizer [Public domain], via Wikimedia Commons

Pfizer Inc. (NYSE:PFE) has reportedly confirmed to The Wall Street Journal that it made another acquisition offer to AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN). However, the U.K. pharmaceutical company apparently turned down the offer, which was worth almost $100 billion.

Pfizer weighs options

According to the report, Pfizer Inc. (NYSE:PFE) is considering strategic options right now. The drug maker said it initially met with AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) in January to discuss a potential merger. Pfizer reportedly described the talks as being “high-level.” However, the talks ended on Jan. 14. Then Pfizer approached AstraZeneca again on April 26.

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The original offer Pfizer Inc. (NYSE:PFE) made to AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) was a combination of cash and stock in the merged company. It represented a 30% premium to AstraZeneca’s closing price on Jan. 3 and valued the company at $76.62 per share of AstraZeneca. Pfizer said the offer valued AstraZeneca at $98.68 billion. Officials from AstraZeneca, however, said the offer “significantly undervalued” the company and “its prospects.” That offer consisted of 70% Pfizer shares and 30% cash. AstraZeneca’s board members were reportedly concerned about the proportion of stock to cash in that offer.

Pfizer tries to pull AstraZeneca back to the bargaining table

Pfizer Inc. (NYSE:PFE) reportedly contacted AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) on Saturday, suggesting that they issue a joint statement saying that they were in discussions about a merger. However, AstraZeneca’s board said it wasn’t appropriate to begin discussions with Pfizer unless there was a “specific and attractive proposal.”

Pfizer Inc. (NYSE:PFE) said if it convinces AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) to merge, then they would do so under a new holding company incorporated in the U.K. Management would be located in both the U.K. and the U.S., the head office would remain in New York, and stock would be listed on the New York Stock Exchange.

News of the new offer from Pfizer Inc. (NYSE:PFE) comes amidst a rush of mergers among major pharmaceutical companies. After Bill Ackman’s involvement, Valeant Pharmaceuticals Intl Inc (NYSE:VRX) offered to acquire Allergan, Inc. (NYSE:AGN) for almost $46 billion last week. Novartis AG (ADR) (NYSE:NVS) has also secured deals with GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) and Eli Lilly and Co (NYSE:LLY) to sell and exchange some of its businesses.

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