AstraZeneca Declares Pfizer Bid 'Inadequate'

Health and Healthcare

Published: May 2, 2014 8:55 am

Last Updated: April 27, 2020 5:02 pm

British drug maker AstraZeneca PLC (NYSE: AZN) once again rejected a takeover bid from U.S. pharmaceutical giant Pfizer Inc. (NYSE: PFE), this one worth $106 billion (about £50 a share) in cash and stock. AstraZeneca has already rejected earlier bids of around £48 made in April and £46 made in January.

In a press release Friday morning, AstraZeneca said that Pfizer’s offer was not a “basis on which to engage Pfizer. The large proportion of the consideration payable in Pfizer shares and the tax-driven inversion structure remain unchanged. Accordingly, the Board has rejected the Proposal.”

AstraZeneca’s chairman said:

Pfizer’s proposal would dramatically dilute AstraZeneca shareholders’ exposure to our unique pipeline and would create risks around its delivery. As such, the Board has no hesitation in rejecting the Proposal.

AstraZeneca’s key products include Crestor, Seloken/Toprol, Iressa, Faslodex, Zoladex, Pulmicort, Symbicort, Nexium and Seroquel. Pfizer’s key products include Lyrica, Prevnar, Enbrel, Celebrex, Lipitor, Viagra, Zyvox, Norvasc, Sutent and Premarin.

Pfizer’s revenue in 2013 was more than $51.5 billion, basically twice that of AstraZeneca’s $25.7 billion (converted from pounds).

Pfizer is left with a small handful of choices: give up, sweeten the bid yet again or take the offer directly to shareholders. One fund manager told The Wall Street Journal before AstraZeneca rejected this latest offer that a deal could get done at a price of £53 to £55. That may not be enough now, and AstraZeneca appears to want the cash portion of the deal to be larger.

And why not? Pfizer is already going through a restructuring and adding 51,000 new employees and expanding the product pipeline is sure to cause some pain. AstraZeneca wants cash, not promises. Going hostile probably will not help Pfizer’s cause much either.

AstraZeneca’s ADSs were down about 0.5% in premarket trading Friday, at $80.65 in a 52-week range of $46.87 to $82.68. Pfizer’s offer was worth about $84.50.

ALSO READ: The Bullish and Bearish Case for Pfizer and Merck in 2014

Are You Ahead, or Behind on Retirement? (sponsor)

If you’re one of the over 4 Million Americans set to retire this year, you may want to pay attention.

Finding a financial advisor who puts your interest first can be the difference between a rich retirement and barely getting by, and today it’s easier than ever. SmartAsset’s free tool matches you with up to three fiduciary financial advisors that serve your area in minutes. Each advisor has been carefully vetted, and must act in your best interests. Start your search now.

Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.