Late last night Pfizer revealed that it had raised its offer for AstraZeneca to £55 a share, after having an earlier offer of £53.50 turned down on Friday night.
Pfizer has made it clear it will only proceed with its £55 a share offer, which includes a greater share of cash, if it is recommended by the board of the company it is wooing.
But last night it emerged that AstraZeneca’s board is in favour of rejecting this latest offer, believing the majority of its shareholders are fully behind that decision.
Unless there is open revolt from AstraZeneca’s shareholders it appears difficult for Pfizer to continue its interest, given it has made an offer conditional on boardroom support.
If the deal is rejected, Pfizer would be forced to walk away for six months before making another approach under the City’s Takeover Panel rules.
Pfizer’s chairman and chief executive Ian Read said in last night’s statement: “We have tried repeatedly to engage in a constructive process with AstraZeneca to explore a combination of our two companies. Following a conversation with AstraZeneca earlier today, we do not believe that the Astrazeneca board is currently prepared to recommend a deal at a reasonable price.”
Under the final proposal, Astrazeneca shareholders would own 26 per cent of the combined company. Astrazeneca shareholders are now being offered 1.747 shares in the company and 2,476 pence in cash for each of their shares, after Pfizer improved the cash part of the offer by £8.78 per share to 44 per cent.