Pfizer Considers Options After AstraZeneca Snubs Offer
Executives at drug maker Pfizer Inc. say they're continuing to review options after British rival AstraZeneca PLC again rejected their proposal to buy the company, adding that Pfizer would prefer a friendly deal. The latest offer was valued at over $100 billion.
"We believe our revised proposal is compelling," Pfizer CEO Ian Read said Monday, adding that it offers AstraZeneca shareholders more benefits than if the maker of cholesterol blockbuster Crestor remains an independent company.
"We believe they are an excellent strategic fit for Pfizer," Read told analysts during a conference call to discuss Pfizer's first-quarter results.
Asked whether there's "something wrong with Pfizer without AstraZeneca," Read said a deal would accelerate Pfizer's "already good" stand-alone strategy. That includes getting key experimental drugs approved, maximizing sales of existing medicines, particularly in emerging markets, and carefully managing expenses and capital.
Since January, Pfizer has been trying to get AstraZeneca to discuss its bid to buy the company, but says AstraZeneca's board refuses to talk. On Friday, AstraZeneca rejected Pfizer's third offer, a cash-and-stock deal worth about $106 billion, saying it still undervalues the company, particularly its drugs in development.
The deal would include Pfizer moving its official domicile — but not its corporate offices — to London. That would reduce Pfizer's income tax rate, because U.S. rates are considerably higher than in the United Kingdom.
The acquisition also would enable Pfizer, which has grown rapidly as a result of three huge acquisitions since 2000, to reduce costs with yet another round of job and other cost cuts.
Under the UK Takeover Code, New York-based Pfizer has until May 26 to make an official offer to AstraZeneca or withdraw.
Read noted that if the deal happens, Pfizer will still have" a massive presence in the U.S."