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AstraZeneca rejects £69.3bn takeover offer from Pfizer

The British pharmaceutical company said the bid 'undervalued' its worth

AstraZeneca has rejected Pfizer's final £69 billion takeover bid, saying it the US drug giant's offer undervalued the company.

The British pharmaceutical film said the deal would bring “uncertainty and risk” for its shareholders and “undervalues the company and its attractive prospects”.

Pfizer, known for manufacturing Viagra, had upped its offer at the last minute on Sunday, raising the cash portion of the proposal and lifting the overall value to £55 a share compared to £50 at the start of May.

Leif Johansson, the chairman of AstraZeneca, said: “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 minimisation.”

He claimed that from the time of initial talks in January, the US company had “failed to make a compelling strategic, business or value case”.

Pfizer’s plan to take over AstraZeneca and create the world’s biggest drugs company met stiff opposition from its British rival and from politicians and scientists who feared cuts in jobs and research operations as a result of any deal.

Ed Miliband was among those to speak out against the takeover, raising concerns about cuts to research and development spending and jobs in Britain.

MPs debated the issue in Parliament and Unite worked with unions in the US to try to scupper the deal.

Mr Johansson said he shared concerns that a deal would have “serious consequences for the company, our employees and the life sciences sector in the UK, Sweden and the US”.

A spokesman for Pfizer said the company wanted to "meaningfully engage" with its rival AstraZeneca on Sunday.

Ian Read, chairman and CEO of Pfizer, said: “We have tried repeatedly to engage in a constructive process with AstraZeneca to explore a combination of our two companies."

Pfizer also revealed on Sunday that it sent a letter to AstraZeneca’s chairman on Friday with the terms of an improved proposal worth £53.50 a share but that AstraZeneca indicated that its board believed it was too low.

The US company planned to locate a merged company’s headquarters in New York but would have its tax base in the United Kingdom to take advantage of Britain’s lower corporate tax rates.

Additional reporting by PA