AstraZeneca spurned a massive offer of $117 billion from Pfizer. The amount was cited as too low for a deal to be sealed between the two giants.
AstraZeneca deftly turned away an offer that many others probably wouldn’t have been able to resist. The $117 billion being given for a merger of the two companies by Pfizer was rejected.
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The whole procedure has been left in a lurch thanks to this rebuttal by AstraZeneca. Had the two joined hands, it would have resulted in the largest pharmaceutical company on a global level. AstraZeneca had lost its financial status and this process had been going on for some time.
Meanwhile, Pfizer had been on the ascent. The ball is in AstraZeneca’s court. It will be the ultimate decision-maker from now onwards. Pfizer spokespersons said that their offer was the best that could be given and it would remain extant. The remaining choices were AstraZeneca’s alone.
“The fate of the deal is now up to AstraZeneca’s shareholders,” Joan Campion, a Pfizer spokeswoman, wrote in an e-mail today. “We believe our final proposal represents compelling and full value.”
AstraZeneca is worried about its shareholders and that is the major reason behind its rejection of the wooing efforts by Pfizer. Whereas the present offer will dole out 55 pounds per share, AstraZeneca’s head honchos want more than 58.85 pounds per shareholder.
“There’s still a chance Astra shareholders will put pressure on management and try to push for a compromise, but the chances of this deal not being agreed on just increased,” said Savvas Neophytou, a Panmure Gordon & Co. analyst in London.
There is a chance that Pfizer will get sick of waiting for AstraZeneca’s answer and simply head off in other directions. And while there is the alternative of AstraZeneca’s shareholders putting pressure on the administration to accept the offer, from the looks of it such a deal is hardly likely to occur anytime soon.
If the deal goes through though, Pfizer would shift its setup to London. A Pfizer spokesperson said that although meetings were still taking place between the two behemoths, the window of opportunity was available for a limited time span only.
“Following a conversation with AstraZeneca earlier today, we do not believe that the AstraZeneca board is currently prepared to recommend a deal at a reasonable price,” Pfizer Chief Executive Officer Ian Read said in a statement yesterday. “We remain ready to engage in a meaningful dialogue but time for constructive engagement is running out.”
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Were the two companies to undergo a takeover of one over the other, it would be a miracle in itself. However, the very action would raise concerns of monopoly.