With U.K. drugmaker AstraZeneca rejecting Pfizer’s sweetened takeover bid, speculation mounted Monday over whether the companies will be able to successfully negotiate a deal.
As Bloomberg reported, the latest offer to Pfizer’s latest offer, which the U.S.-based pharmaceutical company made Sunday night, valued AstraZeneca at roughly 55 pounds ($92.53) per share, or $117 billion, up from the $106 billion offer it made earlier this month.
Pfizer’s improved offer was also higher than a previously unreported £53.50-per-share ($90) bid made on May 16 while the companies’ representatives negotiated, according to a Pfizer statement. AstraZeneca had rejected that bid right away.
AstraZeneca responded to Pfizer’s latest bid by saying it “undervalues the company and its attractive prospects,” The New York Times reported. According to the company’s statement, AstraZeneca chairman Leif Johansson told company representatives in a conference call that he could only recommend a deal that valued his company at £58.85 ($99) per share, 10 percent more than Pfizer’s May 16 offer.
Johansson told Bloomberg in an interview Monday that he was in fact “surprised” when the higher bid came in Sunday, but that his company has been pushing in its discussions with Pfizer for agreement on other issues besides price, such as regulatory risk.
“The way we have understood Pfizer’s position,” Johansson said, according to Bloomberg, “is that they want to do price and price only, really with one number to get the job done.”
He added: “In negotiations there is a gap—sometimes it can be bridged and sometimes it can’t. We haven’t been able to bridge the gap.”
Meanwhile, AstraZeneca’s share price dropped by as much as 15 percent on Monday, as shareholders reacted to the news.
In its statement, Pfizer indicated that its latest offer is the last it will make. At the same time, it urged AstraZeneca shareholders to force the company to extend a May 26 British City code deadline for agreeing on the transaction’s parameters so that a deal might still be worked out. Pfizer has said it will not present a hostile bid directly to shareholders before the May 26 deadline.
“Pfizer is asking AstraZeneca shareholders to urge the AstraZeneca board to immediately begin meaningful engagement with Pfizer following the talks on 18 May 2014, and extend the period for negotiating a possible transaction,” Pfizer said in its statement. “We remain ready to engage in a meaningful dialogue but time for constructive engagement is running out.”
