Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

Astrazeneca reject Pfizer's 'inadequate' fresh bid

Astrazeneca reject Pfizer's 'inadequate' fresh bid

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.'

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Play Boutique tapes: are top managers better off at small firms?

Boutique tapes: are top managers better off at small firms?

In episode three of our series, boutique bosses discuss whether the best fund managers are more likely to thrive at smaller firms.

Play Boutique tapes: if you want a Ferrari, you have to pay for it

Boutique tapes: if you want a Ferrari, you have to pay for it

In the second part of our four-part series, boutique bosses are asked how they can justify the fees charged by active managers.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter