Analysts believe that AstraZeneca may go hunting for a takeover of its own after US drugs giant Pfizer abandoned its efforts to buy the British group for more than £69 billion.
Pfizer’s decision to walk away had been widely expected after Astra rejected last week’s £55-a-share “final proposal”, arguing that a deal would present “significant risks for shareholders”.
The US maker of Viagra had until 5pm today to announce whether it would be making a formal offer for the group, but two hours before the deadline elapsed the group confirmed that it would not be pressing ahead with a bid.
Ian Read, the Scots-born chairman and chief executive of Pfizer, said: “We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us. As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy.
“We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients’ needs and remaining responsible stewards of our shareholders’ capital.”
Pfizer’s takeover attempt was formally launched at the end of last month, but hostility to the proposed deal included criticism over plans for the newly-merged drugs giant to be redomiciled for tax purposes in the UK while retaining headquarters in New York.
Some analysts now believe that Astra, led by chief executive Pascal Soriot, may look to complete a takeover deal of its own in a bid to boost revenues and help fend off another approach.
Mark Purcell of Barclays said: “The probability of a future AstraZeneca acquisition is dimmed, but not entirely extinguished.”
Kepler Cheuvreux analyst Fabian Wenner added: “The push to make good on its promise of revenue growth could spur it to acquire another company – even though such a move seems to conflict with Soriot’s assurances that AstraZeneca can go it alone.”
Under City takeover rules, Astra could ask its US suitor back to the negotiating table after a three-month cooling-off period. Although that would mark a dramatic change in sentiment for the firm – which has consistently argued against a tie-up – major investors such as BlackRock and Schroders are believed to be keen for talks to resume.In the absence of an invitation, Pfizer will have to wait at least six months if it wanted to make a fresh approach.
Robert Talbut, chief investment officer at Royal London Asset Management, said Astra had been “very dismissive” of the proposed deal, and believes the board should have “engaged more” with investors and its US suitor.
He added: “As shareholders we want to make sure that, if a deal is going to be turned down, it’s been turned down for exactly the right reasons.
“We want them now to explain to us why they haven’t explored this more and why it wasn’t in the best interests of shareholders for this to go ahead.”
Astra chairman Leif Johansson said: “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.”