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WDEL Blog: Allan Loudell

Seemingly "good" news for Delaware: AstraZeneca turns down "final" offer from Pfizer

U.S. pharmaceutical company Pfizer raised its takeover offer for British competitor AstraZeneca by 15 percent over the previous bid. It was supposedly Pfizer's final offer, valued at $92.51 a share.

But AstraZeneca's board promptly repudiated Pfizer, precipitating a plunge in AstraZeneca's share price. AZ's board declared Pfizer's offer represented "an opportunistic attempt to acquire a transformed Astra Zeneca, without reflecting the value of its exciting pipeline."

AZ Chairman Leif Johansson: "The final proposal is a minor improvement which continues to fall short of the board's view of value, and has been rejected..."

So unless there's a shareholder revolt - a possibility - the curtain appears to be coming down on this increasingly bitter courtship.

Technically, British takeover rules give the two companies a few more days (next Monday, May 26th) to start negotiations about a possible takeover.

Pfizer CEO Ian Read tells The WALL STREET JOURNAL: "They can either accept it or reject it. They have until the 26th of May."

AstraZeneca has now spurned Pfizer four times. A Pfizer acquisition of AstraZeneca would have been the largest foreign takeover of a UK (or technically, Anglo-Swedish) company. Many Brits resisted. Critics say Pfizer did not fulfill promises to Sweden's Pharmacia in 2002.

Ironically, AstraZeneca itself was the result of an Anglo-Swedish merger: Sweden's Astra AB morphing with Britain's Zeneca Group. And Zeneca was spun off from Imperial Chemical Industries in 1993.

Should AZ workers in Delaware, and Delawareans generally, breathe a sigh of relief? Not quite. As noted above, you have the possibility of a shareholders' revolt. Some other company could still come courting. Finally, having spurned Pfizer, AZ higher-ups will doubtless face increasing pressure to demonstrate the company is indeed better off on its own.

Indeed, economic analyst Mick Cooper of Edison Investment Research told Reuters: "AstraZeneca will have six months to demonstrate that it was right to reject Pfizer's offer, or face the prospect of a fresh approach."


You can hear my interview with Eric Gordon, Professor in the Ross School of Business and in the law school at The University of Michigan at Ann Arbor, formerly at Johns Hopkins University in Baltimore (and a frequent traveler through Wilmington, including multiple visits to Longwood Gardens)...


Audio Here


More from REUTERS news service:


http://reuters.com/article/2014/05/19/us-astrazeneca-pfizer-idUSBREA3R0H520140519


Here's a GUARDIAN article via BUSINESS INSIDER...


http://www.businessinsider.com/astrazeneca-rejects-pfizers-final-116-billion-takeover-bid-2014-5


From The WALL STREET JOURNAL...


http://online.wsj.com/news/articles/SB10001424052702304198504579571162755980196


Posted at 6:25am on May 19, 2014 by Allan Loudell

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Comments on this post:

mrpizza
Mon, May 19, 2014 8:25pm
Perhaps we should get "Dr. Utopia" to weigh in on this one.


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