AstraZeneca issued a statement on Monday morning denying that rival Pfizer has made an adequate offer to buy the company for a reported $100 billion. Pfizer had requested that the two pharma giants issue a joint statement.
Click here for the Pfizer statement. Click here for the AstraZeneca statement.
Pfizer then announced Monday it wants to pursue a merger with AstraZeneca and that its preliminary $77 a share cash and stock offer is a 30 percent premium over the current price. Pfizer, like AstraZeneca is working to build a drug pipeline as patent protection expires on blockbuster products.
Speculation over an offer from the American company has helped to boost the price of AstraZeneca stock as earlier media reports out of the United Kingdom indicated that Pfizer made a preliminary offer.
AstraZeneca is currently reducing the size of its operations in Delaware and will employ about 2,000 at completion of the process that is expected to include the sale of its South Campus in north Wilmington to JPMorgan Chase.
The statement said the board “considered this request (from Pfizer) and concluded that, absent a specific and attractive proposal, it was not appropriate to engage in discussion.”
The statement confirmed that the companies held an exploratory meeting in early January, with Pfizer offering around $100 per share for AstraZeneca stock, with any merger forming a U.S. listed holding company. AstraZeneca is based in the United Kingdom. It came out of a merger of British and Swedish drug companies.
Delaware waged an aggressive campaign to bring AZ’s North America headquarters to north Wilmington, with road improvements and other incentives. Employment grew to nearly 5,000 at one point.
“The board of AstraZeneca concluded that the proposal very significantly undervalued AstraZeneca and its prospects. The board highlighted its concerns regarding the proposed transaction structure, the statement indicated. Another concern was Pfizer proposing moving is headquarters to the United Kingdom for tax reasons.
AstraZeneca reported that with its rejection of the January offer, Pfizer withdrew the proposal. It has since sought to revive discussions.
AZ claimed its stock price has performed well, due to its efforts to build a diabetes and cancer drug development pipeline.
The company confirmed that it remains confident about its strategy that includes the restructuring in Delaware. That strategy includes about 300 jobs in Delaware moving to its Medimmune business in suburban Washington, D.C.. AstraZeneca also announced plans to spend $100 million its manufacturing site in northern Delaware. In all, the company had announced the reduction of 1,200 jobs in Deaware.
This statement is being made by AstraZeneca without prior agreement or approval of Pfizer, the AZ release noted. “There can be no certainty that an offer will be made nor as to the terms on which any offer might be made. Shareholders are strongly advised to take no action.”
“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” stated Ian Read, CEO of Pfizer. “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. We believe patients all over the globe would benefit from our shared commitment to R&D, which is critical to the future success of the pharmaceutical industry, in the form of potential new therapies that help to fight some of the world’s most feared diseases, such as cancer.”
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