Ending weeks of speculation, AstraZeneca’s (NYSE:AZN) board has officially rejected American pharmaceutical giant, Pfizer Inc. (NYSE:PFE), and its final offer, according to a press release from AstraZeneca released Monday.
Sunday, Pfizer announced that this would be the company’s last offer to AstraZeneca, claiming that it would make no more bids for the British pharmaceutical company, which has a promising line-up of investigational cancer medicines. Pfizer’s latest offer valued AstraZeneca at about $120 billion, or about 55 pounds a share, up from a previous offer of around $106 billion.
“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,” said AstraZeneca Chair Mr. Johansson. “The board is firm in its conviction as to the appropriate terms to recommend to shareholders.” AstraZeneca’s board also revealed that it would not consider any bids less than 58 pounds a share, according to CNN Money.
This latest rejection marks four total offers made by American Pfizer Inc., all of which have been rebuffed by AstraZeneca. Further, AstraZeneca’s board expressed concern that Pfizer’s interest in the company is “fundamentally driven by corporate financial benefits to its shareholders of cost savings and tax minimization,” Mr. Johansson continued.
The board’s concerns were echoed by British lawmakers in previous weeks. Prime Minister David Cameron was outspoken earlier this month regarding the deal, claiming that he expected “stronger commitments” from Pfizer if the deal was to receive the government’s support, and Pfizer representatives where grilled in a series of parliamentary hearings last week over concerns regarding Pfizer’s motivations for acquiring AstraZeneca, and its long-term commitments to the company’s British workforce.
Following news of AstraZeneca’s rejection on Monday, British lawmaker Chuka Umunna, a spokesperson for the Labour Party noted that, “The AstraZeneca board has remained resolute and sought to act in the best long-term interests of the company and its vital work in developing new lifesaving drugs.” He further cautioned, “Pfizer has said today that it will not seek to launch a hostile bid and must not renege on this promise,” per The New York Times.
For its part, Pfizer has expressed its doubts about whether AstraZeneca’s decision to continue as a stand-alone operation. Meanwhile, AstraZeneca has repeatedly highlighted its promising pipeline of investigational cancer medicines, pointing out encouraging results from several clinical trials.
“We have tried repeatedly to engage in a constructive process with AstraZeneca to explore a combination of our two companies,” said Pfizer CEO Ian Read before AstraZeneca’s rejection of the company’s latest bid.
Pfizer said Monday that the company is evaluating its options following the rejection, according to The New York Times. Were Pfizer were to succeed in a takeover of AstraZeneca, it would be the largest foreign takeover of a British company ever; AstraZeneca accounts for about 2 percent of Britain’s exports.