The share price of AstraZeneca has shot up this morning (April 28th) after rival pharmaceutical company Pfizer confirmed it is launching a takeover bid worth billions of pounds for the firm.
Pfizer revealed in a statement that it made an offer for the business at the start of the year, but after only a few days of negotiations between the two parties AstraZeneca ended the talks.
In the statement, Pfizer stated that the company is now considering its options, but the firm has not ruled out the chance of making another takeover bid for its rival. If a merger was to go ahead, one of the biggest companies on the planet would be created as a result.
Pfizer chairman and chief executive Ian Read stated that the company has "great respect" for AstraZeneca, which is why the company has been so keen to make a deal happen.
It was announced by Pfizer that its initial offer in January was comprised of a combination of cash and shares worth £46.61 per AstraZeneca share. The offer represented a 30 per cent premium to AstraZeneca's share price when it was made, though stocks are up today.
Following the news of the takeover attempt this morning, stocks in AstraZeneca shot up by around ten per cent in the early moments of trading on the London Stock Exchange. At 08:31, the share price of the company was up by 9.94 per cent on the start of the day.
Pfizer added that it would only make another firm offer for its rival if AstraZeneca directors voted unanimously in favour of the deal. "The strategic, business and financial rationale for a transaction is compelling," it added.
While investors have responded positively to the news, with the value of AstraZeneca shares shooting up this morning, the share price of Pfizer has been more stable. On Friday on the New York Stock Exchange, shares in Pfizer rose by 0.13 per cent, but dropped by 0.38 per cent in after-hours trading before the weekend.
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