Pfizer defends £63bn takeover bid for AstraZeneca
Wednesday 07 May 2014
Pfizer has defended its £63 billion takeover bid for its UK rival AstraZeneca, insisting its proposal would speed up the development of new drugs and bolster innovation.
The US pharmaceuticals giant — which has had two approaches rejected by Astra — has come under attack from MPs concerned about British jobs and the country’s science industry.
In an infographic posted on its website, Pfizer said the deal — which would be the largest foreign takeover of a UK company — would enable it to “seize new opportunities to expand global research capabilities”.
It also quoted former GlaxoSmithKline boss Sir Richard Sykes, who has described the deal as a “fantastic opportunity” and said the bosses at Pfizer were “first-class people doing first-class research”.
Politicians have voiced their concerns about the threats to UK jobs as well as research and development from the merger, which would result in huge tax savings for Pfizer as it result of it moving its domicile to the UK.
Business Secretary Vince Cable yesterday warned that the Government could intervene in the deal and told MPs that the Coalition would not let Pfizer use the UK as a tax haven, promising to protect domestic interests.
Bosses from both companies have been summoned in front of MPs to discuss the deal. AstraZeneca has so far rejected Pfizer’s advances even though some of the company’s largest investors have called for them to open talks.
Yesterday Pascal Soriot, the company’s chief executive, laid out his defence plan, promising an independent AstraZeneca will nearly double its annual sales to more than $45 billion by 2023 thanks largely to its pipeline of new medicines being developed.
He said that process would be jeopardised by a takeover.
Analysts expect Pfizer to return with another sweetened bid. “We expect the recent flurry of noise coming from Government to provide relatively little of substance and expect a further bid to materialise in the coming weeks,” said Saavas Neophytou at Panmure Gordon, who added that Astra’s new projections imply a valuation of as much as £105 a share.
“We have set out relatively conservative assumptions which should make a bid of £55 per share easily achievable for Pfizer,” the analyst added.
Shares in AstraZeneca, which have risen more than a fifth since news of Pfizer’s interest first emerged, today retreated 1.3 per cent to 4617p, below the £48 the most recent offer — made up of cash and Pfizer shares — is presently valued at.
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