View the article online at http://citywire.co.uk/wealth-manager/article/a749029
Astrazeneca reject Pfizer's 'inadequate' fresh bid
by Danielle Levy on May 02, 2014 at 12:44
Astrazeneca has rejected a fresh takeover bid from US rival Pfizer valuing the pharmaceutical giant at £50 per share.
In a statement to the stockmarket Astra described the bid as 'inadequate' adding 'it substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer'.
'The large proportion of the consideration payable in Pfizer shares and the tax-driven inversion structure remain unchanged,' AstraZeneca said in its statement. 'Accordingly, the board has rejecting the proposal,' the drugs giant told the market.
At 12.30pm shares in Astra were off 9p at 4,806p.
The offer represents a premium of 32% for AstraZeneca shareholders and an even higher 39% premium to the closing price of £35.86 on 3 January 2014, the trading day immediately prior to the date of Pfizer's January proposal.
As part of the deal AstraZeneca shareholders would receive 1.845 shares in the combined company for each AstraZeneca share, and 1,598 pence in cash, representing an indicative value of £50.00 per share.
The US pharma wrote to prime minister David Cameron, reassuring the government of its 'long term commitment to the UK', where it said Pfizer already employs a significant number of colleagues across research, commercial, and administrative roles.
Amongst its promises, it said the combined company's corporate and tax residence would be established in England, with a substantial R&D innovation hub in Cambridge to be completed and 20% of the combined company's total R&D workforce would be in the UK going forward
Pfizer said the offer had been made, having consulted with major shareholders,with the intention of combining the two companies. Pfizer hopes the increased proposal will provide the basis for AstraZeneca to engage with Pfizer and enter into discussions.
In a statement issued on the Stock Exchange earlier this morning, Pfizer said its chairman and CEO contacted AstraZeneca's chairman prior to the revised offer and AstraZeneca indicated it would respond after its board has reviewed the proposal.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
With talk on interest rates on the horizon, our latest roundtable debate covers income investing against a changing backdrop