Boston, MA 05/20/2014 (wallstreetpr) – The London-based pharmaceutical company AstraZeneca plc (ADR) (NYSE:AZN) once again rejected a sweetened takeover bid from the U.S. pharmaceutical giant Pfizer Inc. (NYSE:PFE). AstraZeneca has in recent times turned down offers from Pfizer, even as the U.S. drug company seeks to find a way to fix its potential revenue loss. Pfizer faces widespread patent expiration.
Pfizer made its latest sweetened offer under what it termed a “final” proposal on Sunday. It offered to pay $119 billion in cash and stock to acquire AstraZeneca. However, like in the recent past, the board of AstraZeneca refused to accept the offer and instead claimed it undervalued the company.
However, shareholder unrest is emerging in AstraZeneca following its quick rejection of the offers present by Pfizer. One of the company’s biggest investors has urged the board to restart talks with Pfizer for a possible takeover deal. However, some investors are already celebrating that a deal is headed for a collapse given that Pfizer is running out of time and will be time barred after May 26.
Varied views
Schroders, a British fund manager and an investor in AstraZeneca plc (ADR) (NYSE:AZN), with about two percent stake, has asked AstraZeneca to reconsider its decision regarding the offers by Pfizer. The investor has raised a question over the quick manner in which the board rejects the offers even after Pfizer sweetened its proposal.
However, some investors believe that rejection of the proposals was in the best interest of the shareholders because AstraZeneca plc (ADR) (NYSE:AZN) has intriguing long-term prospects that would be diluted if the company agreed to a takeover deal.
In any case, some investors believe that Pfizer only seeks value for its shareholders especially in the face of mounting market competition as it is poised to face generic drug manufacturers. Furthermore, the company’s aspiration to incorporate in the U.K. betrays its intention in seeking to acquire AstraZeneca. Pfizer looks to U.K. as a suitable base given the friendly tax practice in Europe compared with the U.S.
AstraZeneca plc (ADR) (NYSE:AZN)’s investors such as Aberdeen Asset Management that holds about 2.4 percent stake in the company supported the board’s decision to thwart Pfizer.
No hostile takeover
Although it desperately needs AstraZeneca plc (ADR) (NYSE:AZN), Pfizer said it does intend to make a hostile bid. It instead urged shareholders of AstraZeneca to ask the board to reconsider its decision.
