The share price of AstraZeneca (LSE: AZN) (NYSE: AZN.US) is down close to 2% so far this morning, as the market reacts to yesterday’s announcement by Pfizer that it was withdrawing its £69bn takeover bid, just two hours ahead of the deadline for making a further move, such as launching a hostile bid.
Commenting on Pfizer’s withdrawal, AstraZeneca Chairman Leif Johansson said:
“We note Pfizer’s confirmation that it no longer intends to make an offer for AstraZeneca. We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company.
“We are fully focused on the delivery of our strategy. We have attractive growth prospects and a rapidly progressing pipeline. In the coming months, we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business.”
“I believe this will create significant value for our shareholders, employees and patients who will benefit from our life-changing medicines.“
Shareholders will certainly hope that’s true. AstraZeneca’s share price currently stands at £42.41, some 23% below the £55 per share valuation of Pfizer’s now-withdrawn offer, and 12% lower than its recent bid-fuelled peak in mid-May.
Despite including a “five-year pledge” on UK jobs and facilities, Pfizer’s bid was strongly resisted by AstraZeneca and was also opposed by some politicians, no doubt thinking of Pfizer’s closure of its Sandwich-based research centre in 2011 and Kraft‘s closure of Cadbury’s Somerdale factory in 2010 (which it announced just one week after promising to keep it open), both of which lead to substantial job losses.
Under the rules governing the takeover of public companies Pfizer must now wait six months before it can launch another bid. In that time, it’s expected that the US government may well have made moves to close the tax loophole that some believe motivated Pfizer’s takeover of AstraZeneca. Whether or not Pfizer will remain attracted to the UK pharmaceutical giant for its other qualities, and renew its courtship, remains to be seen.
