The share price of AstraZeneca has fallen heavily this morning (May 19th) after the company announced it has turned down another takeover bid from rival pharmaceutical firm Pfizer.
AstraZeneca stated that the new offer of £55 per share "undervalues the company and its attractive prospects" even though it is worth almost £70 billion in total.
Chairman Leif Johansson added that Pfizer has been unable to build a "compelling strategic, business or value case", with the company's desire to take over AstraZeneca more to do with the corporate financial benefits of such a deal.
He told Radio 4's Today programme that AstraZeneca still believes it is able to provide better value for its shareholders independently, without the need to team up with a larger firm.
Mr Johansson added that the deal carried a "big execution risk" and admitted it has been "controversial", with the merits of a takeover of the British firm debated in the House of Commons. The AstraZeneca chairman also noted how that if a takeover was completed by Pfizer, this may limit the company's ability to get drugs to market quickly.
Pfizer chief executive Ian Read stated that the firm stands by an "unprecedented" offer to the government to retain at least 20% of the two companies' research and development workforce in the UK for at least the next five years. If the deal was to move forward, Pfizer has also promised to base its European HQ in Britain.
Mr Johansson added: "AstraZeneca has created a culture of innovation, with science at the heart of its operations, which will continue to create significant value for patients, shareholders and all stakeholders of AstraZeneca."
However, turning down the new bid from Pfizer has been damaging to the share price of AstraZeneca this morning, as stocks in the firm slipped by more than 13 per cent in the early stages of trading on the London Stock Exchange. By 08:18 BST, shares in the company were 13.23 per cent down on the start of the session.
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