Pfizer confirmed it would not be tabling a formal offer for AstraZeneca (AZ) as the deadline for a bid came to a close yesterday.
AZ has rejected no fewer than four offers – culminating in a final £55 per share bid last week valuing its business at more than £69bn ($116bn) – so it was no surprise that Pfizer formally announced it would abandon the takeover effort.
In a statement, Pfizer chairman and chief executive Ian Read – who received something of a bruising from UK lawmakers as he tried to usher a deal through – said he still believed the offer was full and fair value for AZ, adding: “As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy.”
“We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital,” he concluded.
In response, AZ chairman Leif Johansson said his company “welcomes the opportunity to continue building on the momentum we have already demonstrated as an independent company,” although not all shareholders are happy about that and some have slammed the AZ board for not coming to the negotiation table.
Pfizer has also been criticised for calling its last bid ‘final’, which under UK law meant it was unable to raise it any further before the deadline.
Of course, yesterday’s deadline may not be the end of the story. Pfizer has prevailed in a string of mega-mergers in recent years – including the takeovers of Pharmacia and Wyeth – and may not give up so easily as it tries to reboot its own business, which saw revenues and profits slide in the first quarter and is viewed as having a weak pipeline.
UK takeover rules prohibit it from making another bid for AZ for six months – or three if it is invited back to talks by AZ – but there is nothing to stop the company wooing AZ’s shareholders to try to force negotiations down the line.
In the meantime, AZ will have to work hard to keep the news flowing in its R&D and partnering operations to preserve the credibility of chief executive Pascal Soriot’s promises to deliver between $23bn and $63bn in peak year sales from its mid- and late-stage pipeline.