London : British pharma major AstraZeneca rejected a higher “final proposal” of $117 billion takeover by US firm Pfizer Inc, stating that it “undervalues the company”.

Pfizer Inc, the New York-based maker of blockbuster drugs such as Lipitor and Viagra, had made a final offer of 55 pounds a share to Astrazeneca on Friday, which was 15% higher than its last bid, made on May 2.

Reacting to the final proposal, AstraZeneca said it undervalued the company and “its attractive prospects and has been rejected by the board of AstraZeneca”.

“We have rejected Pfizer’s final proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the Company, our employees and the life-sciences sector in the UK, Sweden and the US,” AstraZeneca Chairman Leif Johansson said.

Pfizer’s approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation, he added.

“From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case,” Johansson said.

He added that “the price at which the Board of AstraZeneca would be prepared to provide a recommendation would have to be more than 10 per cent above the level contained in Pfizer’s Friday Proposal”.

On Sunday, Pfizer had issued a statement making a final proposal under which AstraZeneca shareholders would receive, for each AstraZeneca share, 1.747 shares in the combined entity and 2,476 pence in cash, representing an indicative value of £55.00 ($92.53) per share.

Reiterating the company’s stand not to make a hostile offer, he added: “We will remain disciplined in the price we are willing to pay and we will not depart from that guiding principle. We believe that our proposal represents compelling and full value for AstraZeneca and that other issues that have been raised by AstraZeneca do not represent material difficulties.”

Pfizer had earlier approached AstraZeneca on January 5 and April 26 with a proposal to acquire the company for $100 billion. On May 2, the company had raised the offer to $106 billion. As per the latest bid, Pfizer offered AstraZeneca shareholders 1.747 shares in the combined entity

and 2,476 pence in cash, representing an indicative value of 55 pound ($92.53) per share.

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