LONDON – The board of AstraZeneca on Monday rejected the improved $119 billion takeover offer from U.S. drugmaker Pfizer, a decision that caused a sharp slide in the U.K. company’s share price as many investors think it effectively brings an end to the protracted and increasingly bitter takeover saga.
The board said in a statement that it reiterates its confidence in AstraZeneca’s ability to deliver on its prospects as an independent, science led business.
Pfizer, which is the world’s second-biggest drugmaker by revenue, has been courting No. 8 AstraZeneca since January, arguing their businesses are complementary. On Sunday, it raised its stock-and-cash offer by 15 percent to $118.8 billion. That would be the richest acquisition ever among drugmakers and the third-biggest in any industry, according to figures from research firm Dealogic.
AstraZeneca didn’t take long to reject the new offer, its board arguing Pfizer is making an opportunistic attempt to acquire a transformed AstraZeneca, without reflecting the value of its exciting pipeline of experimental drugs.
Because Pfizer said it won’t raise its offer again or launch a hostile takeover bid over the heads of AstraZeneca’s board, the prospect of a deal looks increasingly remote unless AstraZeneca shareholders urge a change of mind. Pfizer has said it hopes AstraZeneca’s shareholders will push for a deal.
This has been going on for quite some time and we have been in very deep engagement over the whole of the weekend, AstraZeneca Chairman Leif Johansson told the BBC. If Pfizer now says this is the final offer I have to believe what they say.
Shareholders in AstraZeneca PLC seemed to think a deal is now unlikely.
Though it has said its indicative offer is final, Pfizer has, under U.K. takeover rules, until 5 p.m. on May 26 to make a formal bid. If it doesn’t, it cannot make another offer for six months.