AstraZeneca rejects Pfizer’s revised $106 billion offer

The board of AstraZeneca Plc, which met today to consider a revised $106 billon offer from US pharma giant Pfizer Inc, has decided to reject the sweetened bid, saying the offer still undervalued AstraZeneca.

Friday's 50 pounds ($84.47) a share indicative offer followed AstraZeneca's decision to rebuff an earlier proposal that valued it at 58.8 billion pounds, or 46.61 pounds per share.

As per the latest offer, shareholders would receive 1.845 shares in the combined entity for each AstraZeneca share and 1,598 pence in cash.

This is the third time that AstraZeneca has rejected Pfizer's offer and the second in less than a week. Pfizer, the New York-headquartered maker of cholesterol drug Lipitor and Viagra, had made an offer of $101 billion earlier.

''The financial and other terms described in the proposal are inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer. The large proportion of the consideration payable in Pfizer shares and the tax-driven inversion structure remain unchanged. Accordingly, the Board has rejected the proposal,'' AstraZeneca stated in release.

Leif Johansson, chairman of AstraZeneca, said: ''AstraZeneca continues to invest significantly in research, development and manufacturing in the UK, Sweden and the US We are showing strong momentum as an independent company, in particular with our exciting, rapidly progressing pipeline, which the board believes will deliver significant value for shareholders.

Pfizer's proposal would dramatically dilute AstraZeneca shareholders' exposure to our unique pipeline and would create risks around its delivery. As such, the board has no hesitation in rejecting the proposal.''

AstraZeneca also strongly advised not to sell shares at the current offer price. It said there can be no certainty of any further offer or any change as to the terms on which any offer might be made.