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    May 20, 2014

    AstraZeneca rejects Pfizer's $147b offer


    BRITAIN'S AstraZeneca yesterday rejected a sweetened and "final" offer from Pfizer , casting serious doubt on the US drugmaker's plan for a merger to create the world's biggest pharmaceuticals group.

    The rebuff came nine hours after Pfizer said on Sunday it had raised its takeover offer to £55 a share, or around £70 billion (S$147 billion) in total, and would walk away if AstraZeneca did not accept it.

    Shares in AstraZeneca tumbled 13 per cent to £42 in early trade as prospects of a takeover ebbed away.

    Pfizer wants to create the world's largest drugs company, with a headquarters in New York but a tax base in Britain, where corporate tax rates are lower than in the United States.

    It has met entrenched opposition from AstraZeneca, as well as many politicians and scientists who fear cuts to jobs and research.

    AstraZeneca chairman Leif Johansson said he had made clear in discussions with Pfizer that his board could only recommend a bid that was at least 10 per cent above an offer of £53.50 made by Pfizer on Friday, or £58.85.

    In addition to the inadequate price, he also slammed the lack of industrial logic behind Pfizer's move; the risks posed to shareholders by the controversial tax plans; and the threat to life-science jobs in Britain, Sweden and the United States.

    "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 minimisation," Mr Johansson said. "From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case."

    Pfizer's proposed takeover would be the largest foreign acquisition of a British company and is opposed by many scientists and politicians, who fear it would undermine Britain's science base.

    Analyst Tim Anderson at brokerage Bernstein said shares in both companies were likely to be hit if the potential deal falls through.

    The US group said its new offer was final and could not be increased. It said it would not make a hostile offer directly to AstraZeneca shareholders and would proceed with an offer only with the recommendation of the AstraZeneca board.