Business

Drugs giant spurns £63bn takeover bid

DRUGS giant AstraZeneca spurned a new £63 billion takeover offer from US rival Pfizer yesterday, saying it "substantially" undervalued the business.

The UK firm rejected the latest advance from the Viagra maker hours after Pfizer stepped up its pursuit by making the increased offer and giving a direct pledge to the British prime minister on the future of British jobs and research.

At £50 a share, it represented a 7 per cent hike on a previous proposal in January.

But Astra said: "The financial and other terms described in the proposal are inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer."

It's the third time Astra has rebuffed Pfizer, following the initial January offer and a further approach last month.

The possibility of a deal is politically contentious because of Astra's key role in the UK's life sciences industry and manufacturing exports, and because it accounts for nearly 7,000 British jobs.

The offer would see Pfizer re-domiciled in the UK but retain headquarters in New York and remain listed on Wall Street.

It has admitted it hopes to slash its tax bill as part of the deal, paying 21 per cent on earnings in Britain compared with 38 per cent in the US.

If a deal were ultimately to go through, it would be the largest ever foreign takeover of a UK company.

But Astra chairman Leif Johansson said: "AstraZeneca continues to invest significantly in research, development and manufacturing in the UK, Sweden and the US.