AstraZeneca says Pfizer offer 'very significantly' undervalues company

28th Apr 2014 14:40

- Pfizer bid 'very significantly' undervalues company- Pfizer offered to pay 46.61 pound per shares, 30 per cent in cash- No contacts had been held since January 15th- No new proposal has been madeAstraZeneca has not received any further offer from Pfizer nor held concrete contact talks with the US drugs giant since late 2013, the Anglo-Swedish firm said in a regulatory statement issued mid-morning on Monday. Following an initial contact on November 25th 2013, AstraZeneca agreed to hold an "exploratory" meeting with the American firm on January 5th of 2014, the company said. It was then that Pfizer offered to pay £46.61 per share for AstraZeneca. The transaction was to be structured as 30% in cash and the remaining 70% in stock, based on the closing price of Pfizer shares of $30.52 on January 3rd. The proposal also involved a new US-listed and headquartered holding company. The London-based group concluded that the proposal "very significantly" undervalued the company and its prospects. The board also raised concerns regarding the elevated proportion of the consideration to be paid out in shares of Pfizer. AstraZeneca was also worried about Pfizer's intention to redomicile to the UK for tax purposes. As a result of all of the above, on January 12th the company notified its suitor that it had rejected its proposal. Pfizer responded on January 15th that it was no longer actively considering making an offer for AstraZeneca.On April 26th, Ian Read, Chairman and Chief Executive Officer of Pfizer, contacted his peer, Leif Johansson, for the first time since January. No specific new proposal was forthcoming. Even so, Pfizer requested that both companies issue a joint statement, prior to the market open on April 28th, announcing that they had entered into discussions regarding a combination. The request was considered, but absent a specific and attractive proposal, the board deemed that it was not appropriate to engage in discussions with Pfizer.Lastly, AstraZeneca on Monday reiterated that it remains committed to executing the strategy announced in March 2013, centring on re-establishing scientific leadership and returning to growth.As of 14:35 shares of AstraZeneca were 15.28% higher at 4,703.5p. Shares of Pfizer were gaining 3.03% to $31.68 in pre-market trading.Ab