M&G blocks withdrawals from one of its major property funds - in a move reminiscent of Neil Woodford
US drugs giant Pfizer goes public with £60bn overture for UK rival AstraZeneca
Takeover deal would overtake Cadbury deal as the largest in UK history
But unions and MPs fear job losses
By Matt West
Published: 03:58 EDT, 28 April 2014 | Updated: 05:54 EDT, 28 April 2014
US drugs giant Pfizer went public and admitted for the first time today it had made a multi-billion pound approach for UK rival AstraZeneca.
The pharmaceutical giant's initial bid of £58.7 billion was made in January and rebuffed by Astra.
Further overtures this weekend were also rejected.
Overtures: Pfizer has admitted making two multi-0billion pound approaches for UK rival AstraZenica
But Pfizer confirmed its 'continuing interest' in its target, saying it offered shareholders a significant premium to AstraZeneca's share price.
it added it was 'confident a combination is capable of being consummated'.
Speculation about the deal last week sparked a surge in pharmaceutical sector shares, and confirmation of the approach caused another flurry of activity today.
in early morning trade, AstraZeneca shares jumped nearly 12 per cent, or 483.0p higher to 4,658.0p, while Shire - also a long mooted bid target - added 54.0p at 3.264.0p and GlaxoSmithKline gained 18.0p at 1,673.0p.
Were the deal for AstraZeneca to happen, it would be the biggest-ever foreign takeover the UK has seen, easily beating Cadbury's £11.5billion takeover by US food firm Kraft in 2010.
Pfizer disclosed that a cash-and-share proposal fro AstraZeneca at the start of the year had been made at 4,661p per share, a 30 per cent premium to the price at the time, but that following high-level talks, Astra 'declined to pursue negotiations'.
The US firm then sought to revive discussions by contacting its rival on Saturday, but said Astra 'again declined to engage'.
Pfizer said it was considering its options but insisted that a deal would represent a 'highly compelling opportunity' to Astra investors.
It said it would include a 'substantial' cash payment as well as the chance to become significant shareholders in the combined company, sharing in future growth prospects and the benefits such a merger would create.
The transaction would be expected to result in a combination of the two firms under a UK-incorporated holding company, with management on both sides of the Atlantic and head offices in New York, where it would be listed on Wall Street.
Pfizer said: 'We have great respect for AstraZeneca and its proud heritage as an innovation-driven biopharmaceutical business with a rich science-based foundation in both the United Kingdom and Sweden.
'In addition, the United Kingdom has created attractive incentives for companies to manufacture products and maintain and protect intellectual property, and we have seen that capital and jobs have followed these types of incentives.
'We believe patients all over the globe would benefit from our shared commitment to R&D, which is critical to the future success of the pharmaceutical industry, in the form of potential new therapies that help to fight some of the world's most feared diseases, such as cancer.'
Astra had remained silent about the bid speculation when it published a trading update last Thursday, that showed first quarter revenues up 3 per cent.
Mega deal: The deal for AstraZeneca would be the biggest-ever foreign takeover of a UK business
Meanwhile unions and MPs have voiced concerns about the potential impact on jobs and manufacturing exports from any takeover deal. AstraZeneca has 2,500 staff in Britain, including just 160 working on R&D in Cambridge.
Unlike Pfizer, AstraZeneca also has major manufacturing operations in Britain, with almost 3,000 staff at its Macclesfield factory site.
A senior industry source said: 'Pfizer would just come and rip it apart. It would take a very large knife to the salesforce, and would try to rip out costs'.
Alan Black from the GMB Union said: 'The Government should consider very carefully as to whether they would allow a merger of this significance to happen.
'AstraZeneca is too important to the UK economy for the Government to abrogate their responsibilities.'
Julian Huppert, Liberal Democrat MP for Cambridge – where AstraZeneca is building a new research facility – said: 'I wouldn't want to see something like this resulting in fewer jobs for the UK.'
It comes as Astra moves its research centre to Cambridge where it recently announced the launch of a joint facility with the Medical Research Council.
The company was itself formed through the merger of Sweden's Astra and Britain's Zeneca Group in 1999 which was itself spun-out of ICI in 1993. It is one of the world's biggest pharmaceutical companies and produces a large range of medicines including cancer and diabetes drugs.
AstraZeneca reported revenues down 6 per cent to $25.7 billion (£15.3 billion) last year, reflecting the loss of exclusivity on a number of drugs it had developed as patents ran out and generic competition had an impact.
Pfizer's revenues of $51.6 billion (£30.7 billion) for 2013 were also down 6 per cent on the previous year as it suffered similar patent expiries.
A takeover of AstraZeneca would dwarf Pfizer's previous deal to buy rival Wyeth for $68 billion (£48 billion) in 2009.
New York-based Pfizer employs more than 900 people at its UK headquarters at Walton Oaks in Surrey.
The drug company, whose best-known drug is impotency treatment Viagra, is sitting on a £42billion war-chest in its overseas subsidiaries and is said to be looking for acquisitions.
It initially denied last week that it had made an approach for Astra and investor focus turned instead to a multi-billion pound tie-up between GlaxoSmithKline and Novartis of Switzerland as the drugs industry consolidation fever took hold.
SMALL CAP SHARE IDEAS: DiscoverIE plugs into booming...