AstraZeneca rejects Pfizer’s ‘final’ offer

Just nine hours after Pfizer raised its offer from £53.50 a share on Friday, to £55 on Sunday, AstraZenca rejected the offer as the markets opened at 7am.

The US company had said it would not enter into a hostile takeover, and would walk away if the latest bid was not accepted. But it has not yet responded to AstraZeneca’s rejection of the offer.

The latest bid, which comes after lengthy talks over the weekend, was still viewed as falling short of properly valuing AstraZeneca. Leif Johansson, chairman of AstraZeneca said: “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.”

Mr Johansson said he had made clear in discussions with Pfizer that his board could only recommend a bid that was at least 10 per cent above the offer of £53.50 made by Pfizer, or £58.85. It remains to be seen whether AstraZeneca’s shareholders will try to convince the company to reopen negotiations with Pfizer.

Pfizer wants to create the world’s largest drugs company, with a headquarters in New York but a tax base in Britain, where corporate tax rates are lower than in the United States. However the plans have been met with entrenched opposition from AstraZeneca, as well as many politicians and scientists who fear cuts to jobs and research.

Bid ‘driven by corporate financial benefits’

Pfizer’s proposed takeover would be the largest ever foreign acquisition of a British firm and is opposed by many scientists and politicians who fear it will undermine Britain’s science base.

The US. group said its new offer was final and could not be increased. It said it would not make a hostile offer directly to AstraZeneca shareholders and would only proceed with an offer with the recommendation of the AstraZeneca board.

In a statement on Monday, Mr Johansson added: “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. 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.”

Video: The planned takeover would be the biggest ever by a foreign firm. But would it boost Britain’s economy – or cost jobs? City AM editor Allister Heath and Labour MP Katy Clark debate the question.