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AstraZeneca rejects new Pfizer bid AstraZeneca rejects new Pfizer bid
(35 minutes later)
UK drugs company AstraZeneca has rejected an improved "final" takeover offer from US drugs giant Pfizer.UK drugs company AstraZeneca has rejected an improved "final" takeover offer from US drugs giant Pfizer.
Pfizer had made a new offer of £55 per share, valuing AstraZeneca at about £69bn.Pfizer had made a new offer of £55 per share, valuing AstraZeneca at about £69bn.
But AstraZeneca says the new proposal "undervalues the company and its attractive prospects".But AstraZeneca says the new proposal "undervalues the company and its attractive prospects".
"We have rejected Pfizer's final proposal because it is inadequate," said AstraZeneca chairman Leif Johansson. Pfizer's pursuit has been under scrutiny because of fears it would hamper AstraZeneca's drug research and cut jobs.
Pfizer plans to create the world's largest drug company, with its headquarters in New York, but based in the UK for tax purposes. Pfizer planned to create the world's largest drug company, with its headquarters in New York, but based in the UK for tax purposes.
In a strategy known as "tax inversion" Pfizer could pay the UK corporate tax rate of 20%, rather than the 35% rate applied in the US, if it bought AstraZeneca.
That plan has proved controversial with unions and politicians, with AstraZeneca employing 6,700 people in the UK.That plan has proved controversial with unions and politicians, with AstraZeneca employing 6,700 people in the UK.
Mr Johansson said Pfizer's pursuit had been "fundamentally driven" by the corporate financial benefits. AstraZeneca chairman Leif Johansson said Pfizer's pursuit had been "fundamentally driven" by the corporate financial benefits.
"Pfizer has failed to make a compelling strategic, business or value case," he added."Pfizer has failed to make a compelling strategic, business or value case," he added.
The US firm has argued that it plans to retain at least 20% of the two companies' research and development workforce in the UK for at least five years and base its European HQ in Britain.
In its new offer statement, Pfizer chief executive Ian Read said: "We stand by our unprecedented commitments to the UK government."
Pfizer had said that its improved offer of £55 per share was "final" and would not be increased.
AstraZeneca shareholders were being offered £24.76 in cash and 1.747 shares in the new firm - worth a combined £55 - for each share currently they hold.
Pfizer had also promised not to mount a hostile takeover - a direct approach to shareholders of AstraZeneca without the involvement of its board.