AstraZeneca rejects Pfizer’s improved and “final” offer of £55 a share

After what must have been a hectic weekend of cross Atlantic activity, the board of Anglo-Swedish drug major AstraZeneca (LSE: AZN) has turned down a revised offer from its suitor US pharma giant Pfizer (NYSE: PFE), saying it is still too low and does not reflect the UK based company’s true value.

Late Sunday, saying it was its “final” offer, Pfizer announced a bid of £55 a share for the company, a total of around £69 billion ($115.92 billion), a substantial increase of about 15% over the current value of Pfizer's May 2 proposal of £50 a share which was rejected by the UK-based company (The Pharma Letters passim). Shares of AstraZeneca fell nearly 14% to £41.60 in early trading this morning.

The cash consideration of the bid was increased by £8.78 per AstraZeneca share, or around £11.3 billion, raising the cash proportion from around 33% to 45% as indicated in its earlier £50/share offer. Ahead of the final offer, Pfizer last Friday upped its bid to £53.50 a share and this was verbally turned down.