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.
Pfizer noted the £50 per share offer represented a 22% premium on Astra's all-time high closing price of £41.03 since formation of the company in 1999.
Commenting on the proposal, Ian Read, chairman and CEO of Pfizer, said: 'We have seen significant positive market reaction to the announcement we made on April 28, including from the shareholders of both our companies.
'The consistent message we have heard reinforces our belief that there is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies.'
He added: 'We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies.'