Posted: May 2, 2014 4:02 AM
Updated: May 2, 2014 4:03 AM
LONDON (AP) The board of pharmaceutical company AstraZeneca has rejected drug maker Pfizer's sweetened takeover offer.
The board says in a statement Friday that the terms are inadequate and substantially undervalue AstraZeneca. It says the board did not hesitate in rejecting the proposal.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
Drug maker Pfizer sweetened its takeover offer for U.K.-based AstraZeneca on Friday and outlined measures it hopes will ease British government concerns over the deal.
The Viagra maker said it is offering 50 pounds ($84) a share in cash and stock, a 7.3 increase on the previous bid. The offer values AstraZeneca at $106 billion.
"There is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies," Pfizer CEO Ian Read said in a statement announcing the offer.
AstraZeneca, which had shot down earlier takeover attempts, replied in a statement that its board would meet to discuss the latest offer.
Pfizer also sent a letter to Prime Minister David Cameron, promising to keep the country's corporate and tax residence in England and saying the "golden triangle of Oxford, Cambridge and London would represent a vital component" of the deal.
Critics fear the takeover could mean big job losses, and the potential loss of stature in the science sector in Britain has become a political issue.
"This does look a little bit like a transaction which has tax planning as a rationale," the opposition Labour Party's shadow business secretary, Chuka Umunna, told the BBC.
Pfizer Inc. is the world's second-biggest drugmaker by revenue while AstraZeneca PLC ranks eighth. AstraZeneca was created in 1999 through the merger of Sweden's Astra and Britain's Zeneca.