British pharmaceutical group AstraZeneca dismissed a takeover bid by Pfizer, which the New York-based drug maker termed as “final” over the weekend.
AstraZeneca explained its reasons for rejecting the deal in a statement, citing “uncertainty and risks” for investors. The dismissal came just a couple of hours after the Viagra manufacturer boosted its attempt to about $93 per share in a deal that would have resulted in creation of the largest pharmaceutical firm in the world.
“Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimization,” Leif Johansson, chairman of AstraZeneca said in a statement on Monday.
As USA Today reports, he added that Pfizer failed to present a value-adding deal to AstraZeneca, despite having had an opportunity to do so “from our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between.”
According to analyst Basil Petrides of Beaufort Securities in London, any further aggressive takeover bid by Pfizer for AstraZeneca would likely elicit negative public sentiments and renewed backing for the latter’s board, which already seems to enjoy the support of investors.
Yet, Petrides believes that, while Pfizer may choose to not make another offer again at present, it still can wait till May 26 before it can be necessary to walk away. He said that the deal is important to Pfizer, making it almost impossible to go away now. The US drug maker’s business model is built around mergers and acquisitions and it has already pin-pointed AstraZeneca as its next target, Petrides added.
According to Reuters, Johansson said Pfizer’s takeover price was below par. In addition, the move did not address the issue of possible loss of jobs in life science in the UK, US and Sweden. He also cited risk presented to investors by the contentious tax plans.
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