AstraZeneca board rejects Pfizer's 'final' proposal

BY Catherine Boyle | FROM CNBC | 2014-05-19 15:48

  AstraZeneca has rejected a final ?69 billion ($116 billion) bid from Pfizer, saying the offer is inadequate and would present significant risks for shareholders.

  The AstraZeneca board would need an offer of closer to ?59 per share to come to the table with U.S. giant Pfizer, but Pfizer's current offer stands at ?55 per share.

  Shares in AstraZeneca dropped by 13 percent in early Monday morning trading following the announcement that it had rejected Pfizer's revised offer.After a months-long courtship of the smaller U.K. company, Pfizer came back with a ?53.50 per share bid on Friday, before raising it again to ?55 per share late Sunday night. The latest bid is around 45 percent cash to 55 percent shares in the merged company - a substantial hike in the 33 percent cash offered earlier in the month.

  The U.S.predator has said that the ?55 per share bid is "final" and that it will not go hostile.

  Ian Read, chief executive of Pfizer, expressed his frustration with AstraZeneca's management.

  He said in a statement: "We have tried repeatedly to engage in a constructive process with AstraZeneca to explore a combination of our two companies.Following a conversation with AstraZeneca earlier today, we do not believe that the AstraZeneca board is currently prepared to recommend a deal at a reasonable price."

  The deal has already caused political turmoil in the U.K., with politicians lining up to criticize Pfizer's previous record in takeovers. Pfizer has pledged to keep at least 20 percent of the merged company's research and development in the U.K.for five years in the event of a successful bid, in a move described by Read as "unprecedented."


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