The rebuff came nine hours after Pfizer said on Sunday it had
raised its takeover offer to 55 pounds a share, or around 70 billion
pounds ($118 billion) in total, and would walk away if AstraZeneca
did not accept it.
Shares in AstraZeneca tumbled 13 percent to 42 pounds by late
morning as prospects of a takeover ebbed away. Some major
shareholders expressed annoyance at the board's stance.
Pfizer wants to create the world's largest drugs firm, with a
headquarters in New York but a tax base in Britain, where corporate
tax rates are lower than in the United States. The plan has met
entrenched opposition from AstraZeneca, as well as politicians and
scientists who fear cuts to jobs and research.
"It died of multiple wounds. Too little cash, too many suspicions
about Pfizer's motives, and too little confidence in its assurances
about jobs," said Erik Gordon, professor at the University of
Michigan's Ross School of Business. "Pfizer's chances are going
down, despite its offer of a higher price."
AstraZeneca Chairman Leif Johansson said he had made clear in
discussions with Pfizer that his board could only recommend a bid
that was at least 10 percent above an offer of 53.50 pounds made by
Pfizer on Friday, or 58.85 pounds.
In addition to the inadequate price, Johansson also slammed the lack
industrial logic behind Pfizer's move; the risks posed to
shareholders by the controversial tax plans; and the threat to life
science jobs in Britain, Sweden and the United States.
"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 minimization," Johansson
"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."
Johansson's refusal to engage in discussions angered some
shareholders, with one fund manager at a top-10 investor in the
group telling Reuters: "We do not think the Astra management have
done a good job on behalf of shareholders.
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Alastair Gunn of top-30 shareholder Jupiter Fund Management said:
"We are disappointed the board of AstraZeneca has rejected Pfizer's
latest offer so categorically. They should have at least engaged in
a constructive conversation with Pfizer."
However, Pfizer's proposed takeover would be the largest-ever
foreign acquisition of a British company and is opposed by many
scientists and politicians who fear it would undermine Britain's
The U.S. group said its new offer was final and could not be
increased. It said it would not make a hostile offer directly to
AstraZeneca shareholders and would only proceed with an offer with
the recommendation of the AstraZeneca board.
Pfizer also increased the cash element in its offer to 45 percent,
under which AstraZeneca shareholders would get 1.747 shares in the
enlarged company for each of their AstraZeneca shares and 24.76
pounds in cash.
The new offer represents a 15-percent premium over the current value
of a cash-and-share approach made on May 2 - worth 50 pounds a share
at the time - which was also swiftly rejected by AstraZeneca.
Pfizer Chief Executive Ian Read said he believed his proposal was
"compelling" for AstraZeneca shareholders and expressed frustration
at its refusal to talk, urging the British company's shareholders to
pressure its board to engage.
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