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Pfizer raises AstraZeneca offer AstraZeneca rejects new Pfizer offer
(about 1 hour later)
US drugs giant Pfizer has raised the price it is offering for AstraZeneca to £50 a share, valuing the firm at £63bn. UK drugs firm AstraZeneca has rejected the new takeover offer from Pfizer.
The US company had earlier raised the price it was offering for AstraZeneca to the equivalent of £50 a share, valuing the firm at £63bn.
But Astra said the new terms offered were, "inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer".
If the deal were to go through it would be the biggest takeover of a UK company by a foreign firm.
Pfizer's initial offer in January was worth £46.61 per AstraZeneca share, and was rejected by the UK firm.Pfizer's initial offer in January was worth £46.61 per AstraZeneca share, and was rejected by the UK firm.
If successful, the deal would be the biggest takeover of a UK company by a foreign firm. Earlier on Friday, Pfizer had also sent a letter to Prime Minister David Cameron to try to address concerns over the bid.
Pfizer also sent a letter to Prime Minister David Cameron to try to address concerns over the bid.
There have been worries that a takeover of AstraZeneca could affect the number of skilled jobs in the UK, where Astra employs about 6,700 people.There have been worries that a takeover of AstraZeneca could affect the number of skilled jobs in the UK, where Astra employs about 6,700 people.
On Wednesday, four scientific bodies raised concerns about possible UK lab closures following a Pfizer deal, and a committee of MPs is considering an inquiry into the issue.On Wednesday, four scientific bodies raised concerns about possible UK lab closures following a Pfizer deal, and a committee of MPs is considering an inquiry into the issue.
Pfizer told Mr Cameron it would go ahead with Astra's planned research and development (R&D) base in Cambridge, and retain its Macclesfield manufacturing facilities.Pfizer told Mr Cameron it would go ahead with Astra's planned research and development (R&D) base in Cambridge, and retain its Macclesfield manufacturing facilities.
Pfizer also pledged that if the deal went ahead, 20% of the combined company's R&D workforce would be based in the UK.Pfizer also pledged that if the deal went ahead, 20% of the combined company's R&D workforce would be based in the UK.
The US firm said its commitments would be valid for five years, unless circumstances changed significantly.The US firm said its commitments would be valid for five years, unless circumstances changed significantly.
On Friday, Conservative peer Lord Heseltine called for greater powers for the UK government to intervene in foreign takeovers if crucial UK interests were at risk.On Friday, Conservative peer Lord Heseltine called for greater powers for the UK government to intervene in foreign takeovers if crucial UK interests were at risk.
'Compelling rationale''Compelling rationale'
AstraZeneca confirmed on Monday that Pfizer had made a takeover approach for the company in January, but said that offer "significantly undervalued" the firm, which employs more than 51,000 staff worldwide.AstraZeneca confirmed on Monday that Pfizer had made a takeover approach for the company in January, but said that offer "significantly undervalued" the firm, which employs more than 51,000 staff worldwide.
Following Pfizer's latest approach, AstraZeneca said its board would meet to discuss the proposal and "a further announcement will be made when appropriate".
Announcing Pfizer's new offer, Pfizer chairman and chief executive Ian Read said: "We have seen significant positive market reaction to the announcement we made on April 28, including from the shareholders of both our companies.Announcing Pfizer's new offer, Pfizer chairman and chief executive Ian Read said: "We have seen significant positive market reaction to the announcement we made on April 28, including from the shareholders of both our companies.
"The consistent message we have heard reinforces our belief that there is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies."The consistent message we have heard reinforces our belief that there is a highly compelling strategic, business and financial rationale for combining our businesses, with significant benefits for shareholders and stakeholders of both companies.
"We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies.""We believe our proposal is responsive to the views of AstraZeneca shareholders and provides a sound basis upon which to arrive at recommendable terms for the combination of our two companies."
Pfizer - whose drugs include Viagra - has a global workforce of more than 70,000, with 2,500 in the UK.Pfizer - whose drugs include Viagra - has a global workforce of more than 70,000, with 2,500 in the UK.
The company said it wanted to establish its corporate and tax residence in the UK, as well as its European headquarters.The company said it wanted to establish its corporate and tax residence in the UK, as well as its European headquarters.
Heather Self, a tax expert at Pinsent Masons, told the BBC: "Pfizer want[s] to put a UK company on top of the whole group which is taking the whole company outside the US tax system."Heather Self, a tax expert at Pinsent Masons, told the BBC: "Pfizer want[s] to put a UK company on top of the whole group which is taking the whole company outside the US tax system."
US federal corporation tax is 35%, while the UK's rate is 21% and is due to be cut to 20% in 2015.US federal corporation tax is 35%, while the UK's rate is 21% and is due to be cut to 20% in 2015.
Ms Self added that a significant tax gain for the UK would be unlikely.Ms Self added that a significant tax gain for the UK would be unlikely.
"All it will mean is moving a few senior people here and having a few board meetings here. It doesn't mean anything for the UK tax industry," she said."All it will mean is moving a few senior people here and having a few board meetings here. It doesn't mean anything for the UK tax industry," she said.
. Labour shadow business secretary Chuka Umunna expressed concerns over job security for AstraZeneca staff.
"Pfizer has a very poor record on previous acquisitions. Do we really want a jewel in the crown of British industry, our second biggest pharmaceutical firm, to basically be seen as an instrument of tax planning?" he said.