LONDON (Alliance News) - Pfizer Inc has Friday increased its bid for AstraZeneca PLC, submitting a revised proposal to combine the two firms, offering a bid that values the UK pharmaceutical giant at approximately GBP64 billion.
The firm's proposal offers AstraZeneca a combined value of GBP50 per share, through which shareholders would receive 1.845 shares in the combined company and 1,598 pence in cash for each AstraZeneca share.
Pfizer said the new offer represents a 39% premium to the closing price of GBP35.86 on January 3, 2014, the trading day immediately prior to the date of Pfizer's initial approach at the beginning of the year.
Under the terms of the deal, the two firms would be combined under a new UK incorporated holding company, with Pfizer and AstraZeneca shareholders owning approximately 73% and 27%, respectively, of the new parent company.
The proposal represents an indicative value of USD84.47 per AstraZeneca share, based on Pfizer's closing share price of USD31.15 on May 1, 2014, the company said.
In a statement Friday, the company said that AstraZeneca has indicated that it would respond after its board has reviewed the proposal.
"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," said Pfizer's Chairman and CEO Ian Read.
In a separate announcement Friday, Pfizer released a letter the Pfizer CEO has sent to the UK Prime Minister David Cameron, detailing the company's commitment to the UK and its life sciences agenda following the revised proposal made to AstraZeneca.
"We would like to assure the Government of our long term commitment to the UK where Pfizer already employs a significant number of colleagues across Research, Commercial, and Administrative roles," said the letter.
Pfizer stated that it is committed to establishing the combined company's corporate and tax residence in England; completing the construction of AstraZeneca's currently planned Cambridge campus; integrate the operations of the combined company so as to employ a minimum of 20% of the combined company's total research and development workforce in the UK going forward; locate manufacturing operations of the combined company in the UK and retain substantial commercial manufacturing facilities in Macclesfield; base the combined company's European business headquarters in the UK; invite at least two AstraZeneca board members to join the board of the new company; and to hold board meetings in the UK.
"The UK Government's efforts to maintain incentives for investment is an important factor to enable success. We make these commitments for a minimum of five years, recognizing our ability, consistent with our fiduciary duties, to adjust these obligations should circumstances significantly change," Read concluded, calling a partnership with the UK government a "critical part of this potential transaction."
Shares in AstraZeneca were trading marginally higher shortly after the market open Friday, up 0.10%
4,820.00 pence per share.