Engineering news
AstraZeneca spurned a new £63 billion takeover offer from US rival Pfizer today, saying it "substantially" undervalued the business.
It is the third time that Astra has rebuffed Pfizer, following the initial January offer and a further approach last month.
The UK firm rejected the latest advance from the Viagra maker hours after Pfizer stepped up its pursuit by making the increased offer and giving a direct pledge to the prime minister on the future of British jobs and research.
At £50 a share, it represented a 7% hike on a previous proposal in January. But Astra said: "The financial and other terms described in the proposal are inadequate, substantially undervalue AstraZeneca and are not a basis on which to engage with Pfizer."
The offer would see Pfizer re-domiciled in the UK but retain headquarters in New York and remain listed on Wall Street. It has admitted it hopes to slash its tax bill as part of the deal, paying 21% on earnings in Britain compared with 38% in the US.
However, the possibility of a deal is politically contentious because of Astra's key role in the UK's life sciences industry and manufacturing exports, and because it accounts for nearly 7,000 British jobs.
Today's letter to David Cameron from Pfizer's Scottish-born chief executive, Ian Read, attempted to assuage government concerns over the proposed deal, pledging a commitment to Astra's planned research and development (R&D) hub in Cambridge.
It also said that 20% of the post-merger R&D workforce of the newly-formed pharmaceutical giant would be in the UK, and looks to locate manufacturing operations in the UK and retain Astra's commercial manufacturing facilities in Macclesfield.
The assurances came after Read held direct talks with chancellor George Osborne and business secretary Vince Cable. Labour accused the government of going over the heads of the British company's board.
Shadow business secretary Chuka Umunna said there was "grave concern" in the sector over the deal.
He told the BBC Radio 4 Today programme: "Do we really want a jewel in the crown of British industry, our second biggest pharmaceutical firm, to basically be seen as an instrument in some tax-planning game?"
Science minister David Willetts told the Today programme that the government had been having "tough conversations" with the US firm and had made clear the importance it attached to research and manufacturing in the UK.
Willetts said ministers had been pressing the US firm "in a very hard-nosed way" and that the company had now beefed up its commitments in the new assurances to Downing Street.
"Their letter has a set of proposals for research and development and manufacturing in the UK that have moved a long way from where they were a week ago," he said.
Pfizer boss Read argued that there was a "compelling" logic behind the mega-merger, which would bring together world-leading expertise in key areas such as oncology, inflammation and cardiovascular and metabolic disorders.
In a letter to AstraZeneca chairman Leif Johansson, Read said his preference was for Pfizer and Astra to pursue a "friendly, negotiated transaction" which can be recommended by both boards.