AstraZeneca rejects Pfizer's last-ditch offer

19th May 2014 07:13

AstraZeneca's board has rejected a final offer from US pharmaceutical rival Pfizer, saying the new proposal still undervalues the company and would present 'significant risks for shareholders'.Pfizer lifted its cash-and-shares bid to £55 a share, up from the previous £50-a-share offer made on May 2nd and a lower initial proposal of £46.61 a share in January.The new offer, which raised the cash element, is thought to value AstraZeneca at around £69bn. This is a 24% higher price than the initial January proposal and represents a 34% premium to AstraZeneca's all-time closing high reached in April.Pfizer had made a proposal on Friday evening at a value of £53.50 a share. Discussions between AstraZeneca management made over the weekend said that it would only accept an offer if it was 10% higher than this."The final proposal is a minor improvement which continues to fall short of the board's view of value and has been rejected," said AstraZeneca's Chairman Leif Johansson."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. [...] Pfizer has failed to make a compelling strategic, business or value case," Johansson said.Pfizer said this is a "final proposal" and would not be increasing it any further, as it called on AstraZeneca shareholders to urge the latter's board to begin "substantive engagement"."Pfizer will not make a hostile offer directly to AstraZeneca shareholders and will only announce an offer with the recommendation of the AstraZeneca board," the US group said.BC