British drug firm shares hit as offer rejected

AstraZeneca rejected a final �69 billion takeover offer from Pfizer.
AstraZeneca rejected a final �69 billion takeover offer from Pfizer.
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THE PRICE of shares in AstraZeneca slumped yesterday after the UK-based firm rejected an improved £69bn final offer by US giant Pfizer for a takeover to create the world’s largest drugs company.

The UK-based firm said the Viagra maker’s proposal undervalued it by £5bn and claimed it was motivated by tax saving and cost-cutting plans.

Astra shares plunged by as much as 15 per cent as the prospect of a deal faded, yet chairman Leif Johansson admitted he had “no idea” whether the saga was over. One leading investor said Pfizer’s offer was a “good price” though it could do better, while an analyst suggested the American firm could come back with a fresh approach in six months.

Astra’s statement echoed fears expressed by critics that a deal would hit jobs and damage the UK’s science base, and they urged the board to continue to stand firm against the mega-merger.

But the FTSE 100 company for the first time revealed a price at which it might be prepared to consider a deal – subject to other key concerns being addressed.

AstraZeneca’s rejection came after a “fourth and final” proposal from Pfizer as a deadline for making a firm offer by next Monday afternoon loomed.

It insisted that the terms undervalued the company and its “exciting prospects”, though a fall in shares in the wake of the announcement left its market value nearly £18bn lower than what Pfizer was prepared to pay.

Astra claimed that the deal would bring “uncertainty and risk”, also highlighting controversial plans to re-domicile a newly-merged company in the UK for tax purposes.