AstraZeneca snubs Pfizer’s “opportunistic” bid
13 May 2014
British drugmaker AstraZeneca Plc today said it had rejected a fresh move by Pfizer Inc, whose public announcement today justifying its merger proposal contained nothing new or substantive new information.
''The board of AstraZeneca believes Pfizer is making an opportunistic attempt to acquire a transformed AstraZeneca, without reflecting the value of its exciting pipeline. This value should accrue fully to AstraZeneca shareholders,'' the company said in a release.
''The board reiterates its confidence in AstraZeneca's ability to deliver on its prospects as an independent, science-led business,'' it added.
US drugmaker Pfizer did not make any fresh offer or revise its £50 a share offer made on 2 May (See: . But, in meetings with UK lawmakers today, the New York-based group's boss hinted it could make a higher offer and preserve British jobs.
Pfizer said it is keen to engage with the AstraZeneca board on the deliverability of the transaction proposes in its 28 April (See: Pfizer confirms AstraZeneca's rejection; to explore options) and 2 May proposals, which involve substantial premium and significant cash component and a significant value creation opportunity for shareholders of AstraZeneca.
Pfizer said it remained disappointed at the lack of engagement by the AstraZeneca board and said it is publishing a presentation to the shareholders of AstraZeneca on the merits of a combination of the two companies.
Pfizer said there is a compelling strategic rationale for a Pfizer-AstraZeneca combination and mutual engagement is in the best interest of stakeholders of both companies.
As the cost of clinical, regulatory and reimbursement risks increase the cost of drug development and the risk profile of the industry, Pfizer said a combination of Pfizer and AstraZeneca would create an industry leader with the scale, operational efficiency, financial strength and breadth of portfolio to better address these challenges.
Pfizer also pointed to the challenges that AstraZeneca's standalone business faces, which include the predictable revenue loss with major products with total 2013 sales of $14 billion facing near-term patent expiration; uncertainty of revenue potential – attractive but high-risk early stage pipeline that still requires significant investment.
Pfizer's 2 May 2014 proposal represents a 37 per cent premium to the mean analyst price target as of 17 April 2014 of £36.565.
The proposal also represents a 32-per cent premium to AstraZeneca's closing share price of £37.82 on 17 April 2014 (the latest trading date preceding speculation of an offer by Pfizer for AstraZeneca).
The transaction is expected to be accretive to adjusted diluted EPS in first full year and ongoing value creation from anticipated operational and financial synergies.
