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AZ video: ‘Why we rejected Pfizer offer’

Published on 02/05/14 at 08:09am
chairman Leif Johansson image
AstraZeneca’s chairman Leif Johansson outlines why the board rejected Pfizer's offer via video

AstraZeneca has confirmed that it is not for turning when it comes to buyout offers from Pfizer and is happy pursuing its own strategy for growth – at least for the time being.

In a video message on AstraZeneca’s corporate website, chairman Leif Johansson explains why the board rejected the US company’s advances.

Chief among these was the view that Pfizer’s financial offer in January for the company “very significantly undervalued AstraZeneca and its prospects”.

Pfizer tried and failed to open communications with AstraZeneca on 26 April for a second time, leaving the US giant ‘considering its options’. There is speculation that Pfizer could be offering as much as $100 billion for AstraZeneca.

Johansson, speaking calmly and confidently against an office backdrop of glass and steel, said there were also concerns about the structure of the transaction, which contained “a large proportion of Pfizer shares”.

He also mentioned the ‘challenges’ inherent in the proposed tax structure of a combined company.

In essence his ‘to whom it may concern’–style message was that AstraZeneca is confident in its ability to execute its stated strategy successfully and that this will benefit shareholders and investors.

He touched on the company’s pipeline and emphasis on science, highlighting projects entering late-stage development.

The UK’s medical research collective has this week come together to warn the government that any deal could put UK research in jeopardy, if AstraZeneca severs much of its research base here.

“Let me leave you with these thoughts,” Johansson goes on. “AstraZeneca has a clear strategy for returning to growth and achieving scientific leadership. Our strong management team led by Pascal Soriot has brought great focus to the organisation, which is driving the momentum behind all elements of the strategy.”

He concludes: “The board has every confidence that through continued successful execution of our strategy we can continue to create significant value for our shareholders and for those people around the world who benefit from our life-changing medicines.”

In other words – for the moment anyway – hands off.

Pfizer raises offer

Meanwhile, Pfizer is preparing to sweeten its bid for AstraZeneca to more than £63 billion ($106 billion) in an attempt to lure the firm to the negotiating table, people with knowledge of the matter tell Bloomberg.

The offer may value AstraZeneca at more than £50 a share and include a larger cash component, and could come as early as next week, says the source. The London-based company rejected a cash-and-stock proposal of £46.61.

Adam Hill 

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