AstraZeneca has rejected a "final" £69.4 billion takeover approach from Pfizer, triggering the biggest one-day drop in its shares on record.
The British pharmaceutical company turned down Pfizer’s fourth proposal just hours after the US drugmaker said it would walk away if its rival refused to enter talks. A top-10 shareholder said they were “sick as a parrot” at the British pharmaceutical company’s decision. AstraZeneca’s shares fell 11.1 per cent to close at £42.87 in London, after opening down 15 per cent.
Leif Johansson, AstraZeneca chairman, said in a statement that Pfizer had "failed to make a compelling strategic, business or value case" for what would be the biggest foreign takeover of a British company.
Pfizer declined to comment yesterday. However, a person close to the company said AstraZeneca’s management now faced a “huge challenge” to deliver on aggressive growth targets set out as part of the company’s defence.
Several analysts have described the forecast for a 75 per cent increase in revenues over the next decade as over-optimistic.
The top-10 shareholder said: "The AstraZeneca board has made a gross miscalculation, and there will be a large number of shareholders very upset at their decision."
The shareholder added they had made their desire for AstraZeneca to engage with Pfizer clear to the UK company’s board, and believed it had not acted in the interests of its investors. “Any bid for this company in the future may well be worth far less than £55.”
The developments leave Pfizer's hopes of creating the world's biggest pharmaceuticals group by sales on the brink of collapse unless AstraZeneca shareholders force the board to back down. Some big shareholders had indicated to the Financial Times in recent days that they would be supportive of an offer of about £55 per share.
AstraZeneca has repeatedly argued that Pfizer’s approaches have failed to fully value its growing pipeline of drugs.
Pfizer's latest proposal represented a 45 per cent premium to the share price on the last trading day before news of Pfizer's interest was first reported last month.
– (Copyright The Financial Times Limited 2014)