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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.
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 activity".
(Reporting by Ben Hirschler; Editing by David Goodman)
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