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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.

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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.

"The three-month cooling-off period is expected to give both firms the time to decide their next respective move."

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.

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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.