Reuters - Video

EDITION: U.S. | U.K. | IN

Video

Pfizer's bid is too bitter for Astra

Monday, May 19, 2014 - 02:21

May.19 - Britain's AstraZeneca has rejected a sweetened offer from Pfizer. But could they live to regret turning down the U.S. drugmaker's plan to create the world's biggest pharmaceuticals group? Ciara Sutton reports

▲ Hide Transcript

View Transcript

At almost 70 billion pounds it would have been the largest ever foreign acquisition of a British company. But AstraZeneca has rejected Pfizer's new "take it or leave it" offer of 55 pounds a share. The deal had faced fierce opposition from UK politicians who feared it would undermine Britain's science base. Pfizer's motivation was also questioned - many seeing it as a way to avoid paying high U.S. taxes. BGC's Mike Ingram says that also raised eyebrows in the States. (SOUNDBITE) (English) BGC MARKET COMMENTATOR, MIKE INGRAM, SAYING: "We've already had a couple of U.S. senators seeking to close the tax inversion loophole which Pfizer will be looking to employ if it did go ahead with a takeover of AstraZeneca. Maybe other than a cooling off of the M&A mania we've seen is perhaps eventually lower corporate tax rates in the U.S. It does seem to be somewhat out of step with the rest of the world now being at 35 percent" AstraZeneca's management was always firmly against a deal. Last week its CEO told UK lawmakers it could disrupt its research and possibly even cost lives. (SOUNDBITE) (English) ASTRAZENECA CHIEF EXECUTIVE OFFICER, PASCAL SORIOT, SAYING: "What will we tell the person whose father died from lung cancer because one of our medicines was delayed - and essentially was delayed because in the meantime our two companies were involved in saving tax and saving costs?" There are also concerns the cost-cutting involved in such a large takeover would lead to less drug making. Pfizer has a tarnished reputation in Britain - where it created the drug Viagra - because it shut down most of its research operations and slashed 1700 jobs. But AstraZeneca's shares tumbled 13% after the rejection - investors could yet influence the outcome. (SOUNDBITE) (English) BGC MARKET COMMENTATOR, MIKE INGRAM, SAYING: "I think they have probably been over aggressive I can't imagine shareholders today are going to be very happy with them and I suspect they are going to be urging them to come back to the table and open the books to Pfiizer in order to try and get a somewhat improved offer." Pfizer has promised it won't make a hostile offer directly to AstraZeneca shareholders. But if with the number of disgruntled investors grows, the company's board could be forced back to the negotiating table.

Pfizer's bid is too bitter for Astra

Monday, May 19, 2014 - 02:21

Top News »

The Exchange »

Moving Pictures »