US pharma major Pfizer's third attempt to acquire AstraZeneca with a sweetened offer of USD 106 billion was rejected today.
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 USD 100 billion earlier.
"Pfizer today announces that, having consulted with major shareholders, it has submitted a revised written proposal to AstraZeneca plc to make an offer to combine the two companies," the company said in a statement.
London-based AstraZeneca said the financial and other terms described in the proposal are inadequate and substantially undervalue the company.
"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," it said in a statement.
Pfizer had previously approached AstraZeneca on January 5 and April 26 with a proposal to acquire the company for USD 100 billion.
AstraZeneca's products include drugs to treat cancer, gastrointestinal and cardiovascular and metabolic diseases.
As per the latest offer by Pfizer, shareholders would receive 1.845 shares in the combined entity for each AstraZeneca share and 1,598 pence in cash.
The proposal represents an indicative value of 50 pounds (USD 84.47) per AstraZeneca share as against an indicative value of 46.61 pounds (USD 76.62) per AstraZeneca share in the earlier proposal.
On the basis of the offered price, the deal would have been valued at around USD 106 billion.
Commenting on the offer, Pfizer Chairman and CEO Ian Read said: "We have seen significant positive market reaction to the announcement we made on April 28, including from the shareholders of both our companies...There is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies."
AstraZeneca Chairman Leif Johansson said: "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."
The company advised its shareholders against taking any action on Pfizer's offer.
"There can be no certainty that an offer will be made nor as to the terms on which any offer might be made," it said.
