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Pfizer ups offer for AstraZeneca again, to $119B

Published on NewsOK Modified: May 18, 2014 at 9:46 pm •  Published: May 18, 2014

NEW YORK (AP) — U.S. drugmaker Pfizer said Sunday that it has raised its offer for British rival AstraZeneca for a third time, hiking its stock-and-cash offer by 15 percent to $118.8 billion, or 70.73 billion pounds.

If the deal is accepted — and it's no sure thing, given opposition to date from AstraZeneca and the British government — it would be the richest acquisition ever among drugmakers and the third-biggest deal in any industry, according to figures from research firm Dealogic. It would be Pfizer's fourth deal worth $60 billion or more since 2000.

Pfizer Inc., the world's second-biggest drugmaker by revenue, has been courting No. 8 AstraZeneca PLC since January, saying their businesses are complementary and would be stronger together.

Pfizer's offer comes amid a surge of other deals as drugmakers look to either grow or eliminate noncore assets to focus on their strengths. Those deals include Switzerland's Novartis AG agreeing to buy GlaxoSmithKline's cancer-drug business for up to $16 billion, to sell most of its vaccines business to GSK for $7.1 billion, plus royalties, and to sell its animal health division to Eli Lilly and Co. of Indianapolis for about $5.4 billion. Canada's Valeant Pharmaceuticals has made an unsolicited offer of nearly $46 billion for Botox maker Allergan, which has turned it down, so far.

Pfizer says its formal proposal "cannot be increased" unless AstraZeneca engages it in discussions before a deadline of 5 p.m. British time on May 26 and recommends a deal.

Pfizer also increased the ratio of cash AstraZeneca shareholders would receive, from 33 percent to 45 percent. The latest offer would give them the equivalent of 55 pounds for each AstraZeneca share, split between 1.747 shares of the new company and 2.476 pence in cash.

Pfizer said in a statement that it won't make a hostile offer directly to AstraZeneca's stockholders and will only proceed if the company's board recommends accepting the deal. It said the offer represents a 45 percent premium to AstraZeneca's share price of 37.82 pounds on April 17, before rumors of the deal began circulating.

Pfizer CEO Ian Read said in a statement that the "combination is in the best interests of all stakeholders. We are excited at the opportunity to create a scientific powerhouse, delivering great benefits to patients and science in the UK and across the globe."

Read noted that after speaking with AstraZeneca officials earlier Sunday, he didn't think its board was "prepared to recommend a deal at a reasonable price." Pfizer said it hopes AstraZeneca's shareholders will push for the deal.

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