AstraZeneca Rejects Pfizer Bid With ‘No Hesitation’

AstraZeneca Rejects Pfizer Bid With ‘No Hesitation’

Pfizer Inc. (NYSE:PFE) confirmed earlier this week that it was trying to bring AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) back to the negotiating table after its previous attempt to buy the company fell through this past January. The proposal reportedly valued AstraZeneca at $100 million, roughly its current market cap, but it would have relocated AstraZeneca to the UK for tax purposes and contained the same mix of cash/shares, both provisions that the AstraZeneca board objected to last time.

“The financial and other terms described in the Proposal are inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer,” AstraZeneca wrote in a press release this morning. “The Board has rejected the Proposal.”

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Both Pfizer bids gave AstraZeneca share price a boost

In January, Pfizer Inc. (NYSE:PFE) offered to buy AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) for what amounts to $76.62 per share with a combination of 30% cash and 70% shares in Pfizer, then a significant premium to AstraZeneca’s share price. Both the January bid and Pfizer’s recent overture pushed AstraZeneca’s share price up, closing yesterday at $81.09. It’s not yet clear if investors expected AstraZeneca to take the deal and were trying to cash in, or if it caused them to re-examine the company’s value.

“AstraZeneca continues to invest significantly in research, development and manufacturing in the U.K., Sweden and the US,” said AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) chairman Leif Johansson in a statement. “We are showing strong momentum as an independent company, in particular with our exciting, rapidly progressing pipeline, which the Board believes will deliver significant value for shareholders. 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.”

AstraZeneca tells shareholders not to expect new offers

There has been some speculation that a failed Pfizer Inc. (NYSE:PFE) bid might bring offers from other companies, but the AstraZeneca plc (ADR) (NYSE:AZN) (LON:AZN) announcement advised shareholders to take no action, as there is no guarantee that another offer will be forthcoming or that its terms might be attractive enough to take.

The rejection goes against a recent jump in pharma M&A activity, including Valeant Pharmaceuticals Intl Inc (NYSE:VRX) $46 billion bid for Allergan, Inc. (NYSE:AGN) and a series of deals between Novartis AG (ADR) (NYSE:NVS), GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) and Eli Lilly and Co (NYSE:LLY).

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  1. The Pfizer takeover of AstraZeneca should not be allowed by government on national security grounds. The last government allowed several major foreign takeovers and where Mandelson
    (Business Secretary) for one assured the British people that no job losses would be the case if Kraft took over Cadbury. Now more or less all British jobs have gone. What Pfizer is after again like Kraft et al is ‘brands’, R&D and new product ranges and where it does not matter where they produce these profit generators once they get control. The government will be hoodwinked again over
    time as bit-by-bit Pfizer will take all manufacturing and R&D elsewhere. It is a slow meticulous process where no-one realises what is happening until it is too late and then all the jobs are gone forever. But there is another ‘dark’ side also to this economy decaying process of heavy consolidation in the US$1 trillion+ global pharmaceutical industry and people should be fully aware that as the drug companies consolidate, their morals and integrity become corrupted fully –

    Therefore this and all other mega-deals should be stopped on the grounds of a nation’s long-term national interest. Indeed if government allow these mega-takeovers to go through they are cutting the very throats of all future generations to come when it comes to jobs and long-term employment security in this country and for that matter, any other country that allows this process to persist that indirectly reduces living standards for 90% of the world’s people. Unfortunately the bigger the business, the less they consider social problems and harm to the vast majority of people and that is totally immoral.