UPDATE: UK Pharmaceutical company AstraZeneca has rejected a buyout bid from US company Pfizer.
- AstraZeneca rejects takeover bid
- Chairman says bid would “dramatically dilute” shareholders exposure
- UK, Sweden and US projects remain company’s focus
IN A statement released this morning, AstraZeneca said the “financial and other terms” proposed in Pfizer’s original offer were “inadequate” and “substantially undervalued” AstraZeneca.
Commenting on the decision by the AstraZeneca board of directors to turn down Pfizer’s offer, chairman Leif Johansson said to accept Pfizer’s proposal would “dramatically dilute” AstraZeneca shareholders’ exposure to the company’s momentum it was building with research, development and manufacturing projects in the UK, Sweden and the US.
“Pfizer’s proposal would dramatically dilute AstraZeneca shareholders’ exposure to our unique pipeline and would create risks around its delivery,” Mr Johansson said. “As such, the Board has no hesitation in rejecting the Proposal.”
EARLIER: Pharmaceutical giant, Pfizer has this morning confirmed it has been in talks with AstraZeneca over a multi-billion pound takeover bid
In a statement issued by Pfizer this morning, the company said that it previously submitted a preliminary, non-binding indication of interest to the board of directors of AstraZeneca in January 2014 regarding a possible merger transaction.
However, after “limited high-level discussions”, AstraZeneca declined the offer and the offer was taken off the table.
Pfizer did say, however, that “in light of recent market developments”, the company again contacted AstraZeneca on April 26 2014 seeking to renew discussions in order to develop a proposal that could be recommended by both companies to their shareholders. AstraZeneca again declined to engage. Pfizer is currently considering its options with respect to AstraZeneca.
If the bid had been successful, it would mark the largest UK company takeover by a foreign company.
Pfizer’s previous proposal made to the board of AstraZeneca on January 5 included a combination of cash and shares in the combined entity which represented an indicative value of £46.61 per AstraZeneca share and a substantial premium of approximately 30% to AstraZeneca’s closing share price of £35.86 on January 3, 2014.
Commenting on the possible transaction, Ian Read, Chairman and CEO of Pfizer, said: “We have great respect for AstraZeneca and its proud heritage as an innovation-driven biopharmaceutical business with a rich science-based foundation in both the United Kingdom and Sweden. In addition, the United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives.
“We believe that a transaction would further strengthen our ability to generate strong and consistent cash flow, targeted for both investment in our business and return to shareholders, while at the same time offering an efficient operating structure and the anticipated realization of attractive synergies.”