DealBook: AstraZeneca Rejects ‘Final’ 0ffer by Pfizer

LONDON — AstraZeneca on Monday rejected Pfizer's latest — and, according to the American pharmaceutical giant, its final — takeover bid.

In a drama that has played out privately and publicly in recent weeks, Pfizer has made repeated approaches to the Anglo-Swedish drug maker about a merger. AstraZeneca has rebuffed them all as too low.

The latest offer, made Sunday evening, was worth about $119 billion. On Monday, AstraZeneca said the latest bid "undervalues the company and its attractive prospects."

AstraZeneca's shares fell 13 percent to 4,186 pence in trading in London on Monday morning.

The latest rejection may mean the end of Pfizer's pursuit of a merger, which began last year. The American company has said it will not make a hostile bid for AstraZeneca and will pursue only a friendly combination. Under British takeover rules, Pfizer has until May 26 to decide whether to walk away.

"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 minimization," Leif Johansson, the AstraZeneca chairman, said in a statement.

"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. The board is firm in its conviction as to the appropriate terms to recommend to shareholders."

Sunday's offer represented a 45 percent premium over AstraZeneca's share price before news of Pfizer's interest became public and followed another offer by Pfizer late Friday.

The latest proposal would have given AstraZeneca shareholders 1.747 shares of the combined company, and 24.76 pounds in cash for each of their shares. The offer valued each share of AstraZeneca at about £55, or roughly $92.50.

AstraZeneca, which has an attractive portfolio of cancer drugs, has repeatedly said that it can continue to operate as a stand-alone company and has recently talked about the positive results of several clinical trials in an effort to highlight its future prospects.

Pfizer, the maker of best-selling drugs like Lipitor and Viagra, has raised questions about AstraZeneca's prospects as a stand-alone concern and vowed to keep jobs in Britain in order to convince British politicians to support the deal.

If completed, the deal would be one of the largest acquisitions in the pharmaceutical industry, surpassing Pfizer's takeover of Warner-Lambert 14 years ago. That deal was valued at $90 billion.

British and American lawmakers have both raised concerns about the potential combination.

In Britain, the concern has centered on whether Pfizer would eliminate jobs following a merger. AstraZeneca employs 51,500 people worldwide, including about 6,700 in Britain.

Pfizer has committed to keep at least 20 percent of its research and development work force in Britain following a deal and to complete a research-and-development center being built by AstraZeneca in Cambridge, England.

But British politicians have pointed to Pfizer's decision in 2011 to close research centers in Sandwich, England, as a reason to be concerned about its commitment to keeping jobs in Britain. The closing led to the loss of more than 1,500 jobs.

American politicians have raised questions about the company's plans to reincorporate in Britain following the proposed deal in order to avoid the higher corporate taxes in the United States.

The strategy, known as an inversion, is increasingly popular among American companies, especially in the pharmaceutical industry.

"We have rejected Pfizer's final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the company, our employees and the life-sciences sector in the U.K., Sweden and the U.S.," Mr. Johansson, the AstraZeneca chairman, said.

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