The pharma frenzy continues. After AstraZeneca (AZN) dismissed a generous offer from US rival Pfizer (US:PFE) in January, the latter has been forced to up its bid in a quest to make use of its $70bn (£41bn) cash pile.
Pfizer is trying to sweeten the deal by wooing Downing Street and putting forward a new proposal, representing a 39 per cent premium to Astra's share price as of January 3. Pfizer's hand has been forced, after a swell of M&A activity in the healthcare sector buoyed several companies' share prices over the past week. For instance, the latest proposal still offers a 32 per cent premium to Astra's closing share price on 17 April, one day before news of the attempted takeover broke.
The latest offer is close to £50 per share or £63bn for the company, but analysts believe it could eventually go higher and peak at £55 per share. This compares to the original Janaury offer which totalled £46.61 per share.
On Friday morning AstraZeneca confirmed it received the new proposal but urged shareholders not to take any action while it considered the new terms.
UPDATE: Within hours of receiving the new offer, the board of AstraZeneca turned down the revised proposal claiming it “substantially undervalued” the company. Shareholders were advised, once again, not to take any action.
