World's biggest drug group considering a cash and shares offer at a 'significant premium' to AstraZeneca's share price
Pfizer has confirmed details of a multi-billion pound takeover approach for UK company AstraZeneca. Photograph: Dan Kitwood/PA
Pfizer has set the stage for a battle to buy Britain's AstraZeneca after the US drugs giant said it was willing to pay almost £60bn to secure the biggest foreign takeover of a UK company.
The news sent AstraZeneca's shares soaring by 15%, to £46.91, adding almost £8bn to the company's market value.
In a statement to the stock exchange, the world's biggest drug group said it had approached AstraZeneca twice this year about a takeover but had been rejected both times.
Pfizer made its first approach in January and indicated it was willing to pay £46.61 a share in cash and shares, valuing the AstraZeneca at £58.8bn. The companies discussed a potential deal but AstraZeneca broke off talks on 14 January.
The US company contacted AstraZeneca again on Saturday about reopening talks but the UK company rejected the approach.
Pfizer, best known for producing Viagra, said it was considering its options and that it was considering a cash and shares offer at a "significant premium" to AstraZeneca's share price. Under takeover rules it has until 26 May to make a firm offer unless an extension is granted.
Pfizer said an offer for AstraZeneca would give the UK group's shareholders a payout worth much more than the "undisturbed" share price on 17 April, before bid speculation started. The shares closed that day at £37.83 but after Pfizer's announcement jumped to £47.07 – above Pfizer's earlier mooted offer and valuing AstraZeneca at £59.5bn.
Under Pfizer's plan, the combined company would be incorporated in the UK with shares listed in New York and management in the Britain and the US. The arrangement would mean Pfizer would not pay US tax on its non-US earnings.
Ian Read, Pfizer's chief executive, said: "We have great respect for AstraZeneca and its proud heritage as an innovation-driven biopharmaceutical business with a rich science-based foundation in both the United Kingdom and Sweden. In addition, the United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives."
Speculation about a possible bid from Pfizer has sent AstraZeneca's shares up since Easter. The UK company's chief executive, Pascal Soriot, said last week a takeover at a standard premium would undervalue the company and the progress it was making in developing new products, for example cancer drugs.
Pfizer is said to be keen to put to use some of its £40bn cash pile obtained from its foreign subsidiaries, which would trigger big tax bills if it was repatriated to the US to be paid in dividends.
A takeover of AstraZeneca would be by far the biggest foreign acquisition of a UK company, dwarfing Kraft's £12bn buy-up of Cadbury in 2010 and Telefonica of Spain's £17bn takeover of O2 in 2005.
A deal would raise concerns about job losses among AstraZeneca's 50,000 workforce worldwide.
Pfizer recently closed its main UK research and development centre at Sandwich in Kent with the loss of 2,400 jobs. The closure was a blow to the local economy and the government's plans to increase high-skill jobs.
AstraZeneca said it was examining Pfizer's statement and had no immediate comment.
source: guardian
The news sent AstraZeneca's shares soaring by 15%, to £46.91, adding almost £8bn to the company's market value.
In a statement to the stock exchange, the world's biggest drug group said it had approached AstraZeneca twice this year about a takeover but had been rejected both times.
Pfizer made its first approach in January and indicated it was willing to pay £46.61 a share in cash and shares, valuing the AstraZeneca at £58.8bn. The companies discussed a potential deal but AstraZeneca broke off talks on 14 January.
The US company contacted AstraZeneca again on Saturday about reopening talks but the UK company rejected the approach.
Pfizer, best known for producing Viagra, said it was considering its options and that it was considering a cash and shares offer at a "significant premium" to AstraZeneca's share price. Under takeover rules it has until 26 May to make a firm offer unless an extension is granted.
Pfizer said an offer for AstraZeneca would give the UK group's shareholders a payout worth much more than the "undisturbed" share price on 17 April, before bid speculation started. The shares closed that day at £37.83 but after Pfizer's announcement jumped to £47.07 – above Pfizer's earlier mooted offer and valuing AstraZeneca at £59.5bn.
Under Pfizer's plan, the combined company would be incorporated in the UK with shares listed in New York and management in the Britain and the US. The arrangement would mean Pfizer would not pay US tax on its non-US earnings.
Ian Read, Pfizer's chief executive, said: "We have great respect for AstraZeneca and its proud heritage as an innovation-driven biopharmaceutical business with a rich science-based foundation in both the United Kingdom and Sweden. In addition, the United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives."
Speculation about a possible bid from Pfizer has sent AstraZeneca's shares up since Easter. The UK company's chief executive, Pascal Soriot, said last week a takeover at a standard premium would undervalue the company and the progress it was making in developing new products, for example cancer drugs.
Pfizer is said to be keen to put to use some of its £40bn cash pile obtained from its foreign subsidiaries, which would trigger big tax bills if it was repatriated to the US to be paid in dividends.
A takeover of AstraZeneca would be by far the biggest foreign acquisition of a UK company, dwarfing Kraft's £12bn buy-up of Cadbury in 2010 and Telefonica of Spain's £17bn takeover of O2 in 2005.
A deal would raise concerns about job losses among AstraZeneca's 50,000 workforce worldwide.
Pfizer recently closed its main UK research and development centre at Sandwich in Kent with the loss of 2,400 jobs. The closure was a blow to the local economy and the government's plans to increase high-skill jobs.
AstraZeneca said it was examining Pfizer's statement and had no immediate comment.
source: guardian
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