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Phizer (NYSE:PFE) has officially withdrawn it’s £69 billion offer to acquire British pharmaceutical giant, AstaZeneca (LSE:AZN). According to a statement from Pfizer on 26 May, the deal has been withdrawn and, therefore, will not happen at any time in the near future, if ever.
The text of Pfizer’s announcement read:
On 18 May 2014, Pfizer announced that it had made a final proposal to AstraZeneca to make an offer to combine the two companies. Following the AstraZeneca board’s rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca.
“We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us. As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital,” said Ian Read, Chairman and CEO of Pfizer.
This announcement is made in accordance with Rule 2.8 of the Code. As a result of this announcement Pfizer will, together with any party acting in concert with Pfizer, be bound by the restrictions contained in Rule 2.8 of the Code.”
What Read said to the press was a bit less diplomatic:
“It is inconsistent to me [for the] Government to wish to have a vibrant science center and vibrant investment in clinical research, and yet not to have big market incentives. They’re rightfully proud of the work being done in oncology, yet the UK is one of the countries that has the lowest reimbursement [of] and access to oncology products.
“I think it is regretful because, long term, there was a missed opportunity to have the largest pharmaceuticals company in the world domiciled in the UK, committing 20pc of its R&D over a long period. That would have been very healthy for science in the UK and manufacturing in the UK.”
It is incumbent upon us to explain what it means that the deal has been withdrawn. It would be difficult to say what Pfizer’s strategy will be moving forward. We don’t even know if they have a strategy. This could be the end of it. Nonetheless, if Pfizer wants to approach AZN again, it must wait six months before making any offer of any kind.
There is one small caveat. The two companies could renew negotiations after a period of three months, but only if initiated at the invitation of AstraZeneca. What the board and the shareholders, especially the institutional shareholders, have to say about the deal might be interesting to observe over the next few months. Shareholder opinion is clearly divided, but AZN chief, Leif Johansson, appears to have dismissed the takeover bid completely:
“We note Pfizer’s confirmation that it no longer intends to make an offer for AstraZeneca. We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company. We are fully focused on the delivery of our strategy. We have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business.”
We shall see what we shall see.
