US drug maker Pfizer is expected to formally drop its third takeover bid, worth £69bn, for UK-based drug manufacturer AstraZeneca after the final deadline officially expired at 5pm yesterday.
Under UK acquisition rules, both companies should have a three-month cooling-off period before resuming negotiations if AstraZeneca begins the discussion, otherwise Pfizer can make a new bid in six months.
The three-month cooling-off period is expected to give both firms the time to decide their next respective move.
Pfizer has been working for months to reach a deal with AstraZeneca, despite continued rejections from the UK drug maker.
On 19 May, AstraZeneca board had clearly rejected an improved ‘final’ takeover offer of £69bn from Pfizer.
Under the terms of the improved proposal, AstraZeneca shareholders would receive £24.76 in cash and 1.747 shares in the combined company, worth a combined £55 for each share they currently hold.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The improved proposal makes a substantial increase of about 15% over the current value of Pfizer’s 2 May proposal of £62.6bn.
Pfizer said that the improved proposal of £55 per share is final and will not be raised as it increased the ratio of cash AstraZeneca shareholders would receive, from 33% to 45%.
Earlier this month, the takeover bid raised concerns regarding the company’s commitment to research and development, as well as potential job losses in UK drug research.
Image: Pfizer world headquarters in New York City, US. Photo: courtesy of Jim.henderson.