Pfizer's decision - announced on Monday during a public holiday -
had been widely expected after a rejection by AstraZeneca's board of
its final offer of 55 pounds a share.
Under British takeover rules, AstraZeneca could reach out to Pfizer
in three months and Pfizer could take another run at its smaller
British rival in six months' time, whether it is invited back or
not. But an immediate deal is off the agenda.
Pfizer's final offer was at a price that many analysts and investors
had previously suggested would bring AstraZeneca to the table for
serious negotiations. But in rejecting an earlier offer of 53.50
pounds as undervaluing the company, the British group indicated that
it needed a bid more than 10 percent higher, or at least 58.85
pounds per share, for its board to consider a recommendation.
Pfizer had urged AstraZeneca shareholders to agitate for engagement
and several expressed disappointment at its intransigence, though
others - encouraged by AstraZeneca's promising drug pipeline -
backed the standalone strategy.
The shares fell back to 42.29 pounds by 0820 GMT (4.20 a.m. EDT),
still a premium to the undisturbed price of 37.82 pounds before
Pfizer's bid interest was first reported in mid-April.
Several brokerages, including Societe Generale, Panmure Gordon and
Kepler Cheuvreux, cut their recommendations or price targets for
AstraZeneca after Pfizer's decision to abandon its attempt to buy
the British company.
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SocGen analyst Stephen McGarry, who downgraded the stock to "sell"
from "hold" and set a price target of 36 pounds a share, said the
onus was now on AstraZeneca to deliver on its bullish forecasts for
sales to grow 75 percent to $45 billion by 2023.
Now that the Pfizer bid has gone, AstraZeneca will need to deliver
on its aggressive 2023 targets, he said in a note, adding that
SocGen believes the targets are likely to be "unattainable without
AstraZeneca adding to its revenue and profit stream via M&A
(Reporting by Ben Hirschler; Editing by David Goodman)
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