British pharmaceutical firm AstraZeneca has rejected a new takeover offer form US drugs giant Pfizer.
Pfizer increased its proposal to a final offer of £55 per share, valuing AstraZeneca and £69 billion, but AstraZeneca’s board refused to sell the company, saying that the offer “undervalues the company and its attractive prospects”.
Under the proposal, AstraZeneca shareholders were being offered £24.76 in cash and 1.747 shares in the new firm, in total worth £55 per share. The share price in the company fell over 13% in early trading after its rejection of the offer.
Pfizer planned to create the world’s largest pharmaceutical firm by combining the two companies, and had proposed keeping the firms headquarters in New York, but bringing the company to the UK for tax purposes. The use of AstraZeneca as a tax haven was dismissed by the board of the UK firm, as Leif Johansson, Chairman of AstraZeneca said:
“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.”
Pfizer had also only committed to maintaining 20% of the UK workforce for five years, which made the offer unpopular with politicians and unions, as it would have resulted in major job losses in the UK.