US pharmaceutical group Pfizer appears to have lost the battle for Anglo-Swedish rival AstraZeneca. The firm’s final offer of £55 per share was rejected by Astra’s board as inadequate.
Unless shareholders put pressure on the board to reconsider before the deadline of 26 May, Pfizer will have to wait three months to make a higher offer with Astra’s approval, or six months if it wants to mount a hostile bid.
What the commentators said
“Pfizer was over-confident and never offered enough to win,” said Nils Pratley in The Guardian. A 45% premium to the target’s share price before the bid would usually be enough, but Astra defended itself very effectively.
A bid of £60 might well have tipped the balance, but by tabling a “take-it-or-leave-it” bid and urging Astra’s shareholders to revolt, the firm badly miscalculated.
“Pfizer has a risky way back into a deal,” said Chris Hughes on Breakingviews.com. It has the right to raise its final price if the offer is accepted, so it could signal to Astra’s board that if Astra were to accept £55, Pfizer would immediately significantly increase it.
But the Takeover Panel, which oversees deals in the UK, would not be keen on an attempt to bend the rules and might well block the bid.
So could Pfizer return in six months? Probably not, said Kamal Ahmed on BBC.co.uk. By then, “AstraZeneca shareholders believe the US government will have gone a long way to closing the tax loophole which was one of the reasons for Pfizer being so attracted to AstraZeneca.” The bid seems to be dead.