Big shareholder: Biggest example of value destruction ever
Jupiter: We'll make our disappointment known to Astra's board
Summary: Pfizer defeated, for now....
Why Pfizer can't raise its bid
3.00pm BST
As we predicted at 12.22pm, well-respected City investor Neil Woodford has offered AstraZeneca his backing, saying they were right to reject Pfizer's latest bid.
Woodford said the offer of £55 per share didn't match Astra's long-term potential - a point that the company's management have made repeatedly in recent weeks.
Neil Woodford fund manager with #AZN stake "#Pfizer long way short of something that'd persuade me to trade my belief in #AZNs LT potential"
2.54pm BST
Shares in Pfizer have risen over 1.6% in early trading in New York, as Wall Street traders react to the news that the company's third bid for AstraZeneca has been slapped down.
2.36pm BST
Conservative MP Douglas Carswell has criticised the way in which Pfizer's approach to AstraZeneca became a political football (two different parliamentary committees held hearings last week).
Carswell told Radio 4's The World At One that:
"Listening to the debate in Parliament, I'm very alarmed by the mood of protectionism, of what is, in effect, economic nativism. Countries that have governments that 'pick winners' become losers."
"I think it should disturb all of us that politicians, many of whom frankly couldn't run a bath, suddenly want us to believe that they know what is in the national interest and that they know what constitutes a good deal. It's absurd and it's ridiculous."
2.19pm BST
AstraZeneca's chairman has refused to say whether the board were united in rejecting Pfizer's latest approach.
Leif Johansson denied failing to handle the bid correctly, and added that he sees no prospect of a deal soon.
2.14pm BST
Speaking of elections, Greek politicians and citizens are digesting the results of the first round of local election voting, last weekend.
1.48pm BST
In the bond markets, Spanish and Italian government debt has weakened this morning as traders anticipate a strong showing for anti-establishment parties in this week's EU elections.
Alastair Winter, chief economist at Daniel Stewart & Co, says the elections could destabilise the EU, if parties who oppose the status quo are the big winners.
Here in the UK we face the strange prospect of the largest share of the vote going to a party of protest without practical policies and who do not always turn up to parliamentary sessions. More important will be how well the anti-EMU parties fare in France and Italy, which are quite likely to signal a new episode in the euro soap opera.
1.29pm BST
The Wall Street Journal agrees that Pfizer cannot boost its £55 offer again (as some analysts have been speculating this morning).
Here's how they see the state of play:
Pfizer has until May 26th to make a firm offer for AstraZeneca. But, given its statements on Sunday, it can now only do so with the recommendation of Astras board and at a price no more than £55 a share.
The certainty and speed of Astras rejection makes that highly unlikely. Moreover, UK rules prohibit Pfizer from making a bid for Astra for six months, unless recommended by the targets board. For the first three months, its no increase statement will still apply, meaning a deal would need to be agreed at £55 a share.
12.58pm BST
"I don't think this is the last roll of the dice" - Anne Richards, Chief Investment Officer, AAM believes Pfizer will return in 6 months.
12.57pm BST
AstraZeneca shareholder Aberdeen Asset Mgt also tell @ITVJoel Pfizer may be back for AstraZ in the future
12.57pm BST
Aberdeen Asset Mgt (who own 2.5% of AstraZ) tell @ITVJoel they have confidence in AZ board but want "fuller explanation" of rejection of bid
12.47pm BST
Another sign that investors reckon AstraZeneca has seen its US rival off -- shares in Pfizer are up over 2% in early pre-market trading in New York:
12.43pm BST
Business secretary Vince Cable has warned that the UK economy is being destabilised by booming house prices.
"It is a real, real, real worry" that some people are taking out mortgages many times larger than their salaries, Cable added, according to politics editor Patrick Wintour.
12.32pm BST
Peter Garnry, head of equity strategy at Saxo Bank, agrees that Pfizer is unlikely to make another bid for AstraZeneca, having been rebuffed three times*.
He told clients:
There is rarely a fourth attempt to dance in a takeover bid so based on the developments over the weekend, the probability for a deal is now very low.
Despite Pfizer having spent a large amount of money and time, the signal seems clear from AstraZeneca's Board of Directors, UK politicians and mainstream media that this is a bad deal, and we see limited efforts from Pfizer going forward. Its shareholders will not appreciate a fourth attempt as it will inflate the valuation too much relative to deal risk.
12.22pm BST
Back to AstraZeneca...
Leading fund manager Neil Woodford, whose biggest shareholding in his £4bn portfolio is AstraZeneca, is understood to be minded to reject Pfizer's latest offer.
12.21pm BST
There's no let-up in the changes at the Co-operative Group.
Its longest-standing director, Ben Reid, has just resigned, just days after the Co-op's AGM approved Lord Myners' proposals to reform the Group
The boss of the largest independent society, the Midcounties, Reid tendered his resignation on Monday morning following a tumultuous weekend when the members of the Group voted to reform the way the 150-year-old business is run.
Reid had sat on the board for 14 years and was one of the five representatives of independent societies to have boardroom seats as a result of their 22% share holding in the Group. Another 15 seats are currently held for representatives of the regional boards whose 8m members control 78% of the Group.
Co-op's longest-standing director resigns after reform vote http://t.co/jEJsw3b62C
11.58am BST
David Cameron has now weighed in, saying that the government remains neutral over Pfizer's bid to buy AstraZeneca, and is still talking to both companies to get the best outcome for Britain.
"This is a matter for the companies to resolve themselves".
"The government quite rightly should be neutral in this. What we should do though is always be engaged with both companies - as we have been - to try and make sure that whatever the outcome, British science, British job, British manufacturing, that they get a proper and deserved attention."
David Cameron on Pfizer bid: This is a matter for the companies to resolve themselves. The Govt, quite rightly, should be neutral @BBCNews
11.51am BST
There's no way Pfizer can raise its offer again without getting AstraZeneca onside first, reckons my colleague Sean Farrell who has been checking the situation with City experts:
Qs asked about whether Pfizer can lodge bigger formal offer. I'm told Pfizer cannot offer more than £55 a share before 26 May deadline.
Pfizer offer needs Astra board recommendation. If that happened and Pfizer later had reason to pay more, it could but £55 is the max now.
11.50am BST
Richard Marwood's criticism of AstraZeneca is particularly interesting, as AXA is its third-largest investor with a 4.5% stake.
Jupiter, another firm who voiced concerns this morning, only holds 0.5% of Astra.
11.38am BST
AstraZeneca isn't the only company making news this morning - here's a quick summary of the other big stories:
11.24am BST
AXA's Richard Marwood is the latest investor to go public with his disappointment over AstraZeneca's decision -- he's told ITV that rejection wasn't in shareholders' interests:
Richard Marwood, of Axa tells me "very disappointed" by AZ board "not in shareholders interests" and "very hard to do a deal from here"
11.09am BST
Our financial editor, Nils Pratley, has applauded the AstraZeneca board for its stance on Pfizer:
Well played the board of AstraZeneca. It took a position, argued the merits of a standalone strategy, and has turned down Pfizer's final offer of £55 before any weak-willed fund managers could start muttering their objections. Boards of directors are meant to display independence of mind and backbone. This is a rare occasion when one has.
It is too soon to declare this battle over definitively, but the 14% plunge in AZ's share price says Pfizer requires something extraordinary to happen to get back into the game.
11.09am BST
Here's the full quotes from disgruntled Jupiter fund manager, Alastair Gunn:
"We are disappointed the board of AstraZeneca has rejected Pfizers latest offer so categorically. They should have at least engaged in a constructive conversation with Pfizer on the details of the offer to assess the opportunities that a combined entity could bring."
"There now seems little room left to manoeuvre with Pfizer having ruled out a hostile bid. We will be expressing our dissatisfaction to the AstraZeneca board over the way the bid process has been handled up to now."
10.56am BST
City firm Jupiter Asset Management has just gone public with its disappointment with AstraZeneca's board:
From the Reuters terminal:
10.47am BST
Chuka Umunna, Labour's shadow business secretary, has now issued a formal response to this morning's developments:
"Labour and others have been clear from the outset that if this potential takeover is found not to be in the best interests of British science, jobs and industry it should not proceed - so AstraZeneca's move today to reject Pfizer's final bid is welcome."
"While Labour was standing up for British jobs and British science, David Cameron and his ministers were cheerleading for a takeover bid where one of the primary motivations was financial engineering - cited by the AstraZeneca board as one of the execution risks justifying rejection of the bid.
10.44am BST
The Unite union has urged AstraZeneca shareholders to support the board's decision, and resist the temptation for a "quick buck".
Unite assistant general secretary Tony Burke said investors should "stand firm and look to the long term" (despite being pretty disappointed this morning):
The company has a long term plan and we would urge shareholders to back the workforce and the board.
The latest offer from Pfizer still raises more questions than it answers.
10.40am BST
Reuters has also been speaking to some of AstraZeneca's largest shareholders - and confirms that some of them are unhappy (as we reported at 9.50am)
Here's a flavour:
"We are extremely disappointed with the turn of events at Astra today," said one - a fund manager at a top 10 investor in AstraZeneca after the company rebuffed a raised takeover offer of £55 a share, worth around £70bn ($118bn).
"We do not think the Astra management have done a good job on behalf of shareholders. We had already urged Astra to engage in discussions with Pfizer," added the fund manager on condition of anonymity, as his firm had not authorised him to speak publicly.
Investors who sold out before Astra rejected Pfizer's offer and sent their shares down 11% this morning: Invesco and Capital
10.34am BST
They say Pfizer has the right to ""introduce other forms of consideration and/or vary the mix of consideration", which could mean paying a larger percentage in cash.
"We believe a further cash element would be possible and still meet the conditions of no increase in the overall price and still meet the US tax inversion rules.
The bid is now effectively in the hands of shareholders.
Will pressure from shareholders push the two sides towards a deal at around £57.00?
This is an attractive offer. We expect shareholders to press AstraZeneca to accept this new offer but management will likely want to resist so Pfizer would need to increase its offer one last time.
In mid-morning trading the FTSE 100 is firmly in the red, down 40 points, hit by the latest twist in the AstraZeneca/Pfizer saga.
All attention is focused on AstraZeneca this morning, as the shares dive 14% following the decision of the firm to spurn Pfizers advance. Such a big move in a weighty stock like Astra is bound to leave the index floundering but it is merely a symptom of a wider problem, namely that the market remains directionless after the highs of last week.
Even if Pfizer does walk away, I would expect them to still stalk AstraZeneca and wait for a moment of board weakness to pounce again in the future.
10.09am BST
The Pfizer bid has been a hot potato in Westminster, with the UK government accused of acting like a cheerleader for the US firm - so we shouldn't be surprised that insiders are saying little, so far anyway:
Govt saying little on #Pfizer "we are neutral on the deal and our only interest is in uk science" says one senior official
10.07am BST
Our timeline shows how the battle for AstraZeneca actually began last November, when Pfizer CEO Ian Read suggests the two companies should talk. Six months later, Read found himself being quizzed by MPs....
9.58am BST
So how much have AstraZeneca investors lost? By my reckoning, around £15bn.
Last night the company was valued at almost £61bn -- this morning's double-digit tumble has wiped around £6.5bn off its value.
9.56am BST
AstraZeneca shares are inching back, slightly - now down 10.8% at £43.02 each.
9.50am BST
One of AstraZeneca's biggest shareholders has told the Guardian that the AZ board has committed the single biggest case of shareholder value destruction ever.
My colleague Sean Farrell has the details:
Top 10 AstraZeneca investor says rejecting Pfizer "is the single biggest case of value destruction on behalf of shareholders of all time".
Top 10 AstraZeneca investor says: "I think it [the bid] is closed. Personality clashes have triumphed over shareholder value creation."
9.40am BST
A quick recap if you're just joining us:
"We have rejected Pfizer's Final Proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the Company, our employees and the life-sciences sector in the UK, Sweden and the US."
"From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case.
The Board is firm in its conviction as to the appropriate terms to recommend to shareholders."
In the decision of AZ's board we see the long term overcoming the short term, fast buck mentality we need to see less of in UK business.
We don't want to see the takeover of great British firms driven by financial engineering - we want them to be driven by long term investment
Pfizer now has very few options and is expected to walk away from the deal.
The chances of AstraZeneca remaining out of Pfizers hands I would now rate at 90%.
9.18am BST
Newsflash on Reuters: Sweden's finance minister, Anders Borg, has urged Astra shareholders to be 'careful' about accepting Pfizer's offer:
9.14am BST
Joshua Raymond, chief market strategist at City Index, believes Pfizer will now walk away from AstraZeneca, but could 'stalk' the company and table a bid in future.
He points out that Astra's board has effectively named its price -- £59 per share -- by revealing this morning that it wanted a 10% premium to the £53.50 tabled over the weekend.
AstraZeneca have rejected Pfizers final offer of £55 a share with a sweetened cash incentive, however, in doing so the board of AstraZeneca have also highlighted the price they would be willing to do business, £59 a share.
This is a quite staggering level, which would represent a near 60% premium on AstraZenecas shares price before rumours first emerged of Pfizers imminent bid. Pfizer now has very few options and is expected to walk away from the deal.
Even if Pfizer does walk away, I would expect them to still stalk AstraZeneca and wait for a moment of board weakness to pounce again in the future.
9.09am BST
Aberdeen Asset Management, one of AstraZeneca's largest investors, reckons Pfizer "could do better" than its 'final' £55 per share offer.
Chief Investment Officer Anne Richards told BBC radio that:
"The price is finely balanced."
"I think it's a good price that's on the table at the moment but probably they could do better than that."
8.54am BST
Did Pfizer offer a fair price for AstraZeneca?
It was hard to evaluate the bid, given the uncertainty over how much Pfizer could trim off its tax bill by redomiciling in Britain. Pfizer's reluctance to discuss its cost-cutting plans in detail also added to the opaqueness.
This looks over. Astra shares should plummet. Co faces tough 3 yrs of shrinking earnings before pipeline comes through. $PFE $AZN
And it wasn't a low-ball bid. Every shareholder I talked to (long-term, pharma specialists) thought it attractive at £50 a sh. $AZN
If you say final, the Takeover Panel holds you to that (well, for 6 mths). So AstraZeneca hinting at acceptable price (c. £59) is moot.
8.40am BST
More tweets from Labour's shadow business minister, Chuka Umunna, hailed Astra's board for taking the long-term view:
In the decision of AZ's board we see the long term overcoming the short term, fast buck mentality we need to see less of in UK business.
We don't want to see the takeover of great British firms driven by financial engineering - we want them to be driven by long term investment
8.39am BST
AstraZeneca's sliding share price (still down 13%) has helped to knock the FTSE 100 into the red.
It's down 32 points this morning at 6822; away from the 14-year high hit last week.
8.32am BST
Just interviewed Leif Johansson, AstraZeneca, says Pfizer's approach is not at the "friendly end" of the spectrum. Was blindsided by offer
8.27am BST
FastFT flags up that AstraZeneca's chairman appears a little uncertain about the situation.
Asked if this is the end of the battle, Leif Johansson replied:
I have no idea, this has been going on for quite some time, and in very deep engagement over the whole of the weekend. Pfizer now says this is the final offer - I have to believe them at what they say.
8.25am BST
Not longer a Pfizer riser: #AstraZeneca shares fall 13.1% after management rejected "final" offer from US group
8.17am BST
This charts shows how AstraZeneca's shares have tumbled right back to their level in late April, after Pfizer made its first approach (but before it raised it).
8.07am BST
AstraZeneca shares have tumbled 13% at the start of trading to £41.90 per share.
That's down from £48 on Friday night, as investors react to its decision to rebuff Pfizer's final, £55 per share, offer this morning.
8.05am BST
Astra chairman Johansson also dubbed Pfizer's proposal "controversial" --probably a reference to the company's plans to shift its tax base to the UK from the US.
Pfizer offer "too low" in deal "identified as controversial from beginning", AstraZeneca chairman tells @BBCr4today http://t.co/gwS4D0KbDe
8.03am BST
Speaking on Radio 4's Today programme, AstraZeneca chairman Leif Johansson insisted his board were right to reject Pfizer:
Their offer is too low, we have better opportunity to create value for shareholders... in an undisrupted way.
8.01am BST
#FTSE100 called -15pts as China property data revives slowdown fears, and AZN rejects 'final' £55 PFE bid
8.00am BST
Chuka Umnuna, shadow business minister, says AstraZeneca's board have done the right thing for their company, and the UK.
I very much welcome the rejection of Pfizer's final offer by the board of AstraZeneca.The right decision for the company and for the country
7.58am BST
Trading on the London stock market begins at 8am, so we'll have the City's verdict soon....
AstraZeneca shares closed at £48.23 on Friday night. They were worth £35 in January when Pfizer made its first, quiet, approach, and £38 in April when its ambitions were made public.
7.50am BST
Pfizer has said its bid is "final" and won't go hostile, its only hope now is if AstraZeneca's shareholders rebel against the board.
7.48am BST
Sam Fazeli, Bloomberg's pharmaceuticals correspondent, sees little chance that AstraZeneca's investors will rebel and demand talks with Pfizer.
He explains that shareholders could go to the company and say 'you've made your decision, but now we'd like you to talk to them'.
I think that is unlikely, as it would be a vote of no confidence in the company's management.
7.44am BST
So what happens now?
Under City rules, because Pfizer said its £55 per share offer is "final" it cannot raise it again, unless there's a material change in circumstances (the first bullet point at the bottom of Pfizer's last offer makes this point).
7.30am BST
You can read AstraZeneca's official statement to shareholders here:
7.27am BST
AstraZeneca rebuffs "final" offer of £55/share but seems to suggest that it would have recommended a bid of £58+ to shareholders.
7.25am BST
AstraZeneca chairman Leif Johansson also criticised Pfizer for being motivated by the prospect of cutting its tax bill, by shifting its tax base to the UK.
"Pfizer's approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation. From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case. The Board is firm in its conviction as to the appropriate terms to recommend to shareholders."
"We have rejected Pfizer's Final Proposal because it is inadequate and would present significant risks for shareholders, while also having serious consequences for the Company, our employees and the life-sciences sector in the UK, Sweden and the US."
7.22am BST
Now this is interesting -- AstraZeneca told Pfizer on Friday night that its minimum acceptable price was around £59 per share (or around £74bn in total, I think).
Last night's final offer of£55 per share is obviously short of that:
"Pascal Soriot, Marc Dunoyer and I had a lengthy discussion with Pfizer over the weekend about the proposal Pfizer made on Friday evening at a value of £53.50 per share. During this discussion, Pfizer said that it could consider only minor improvements in the financial terms of the Friday Proposal. In response, we indicated, even assuming that other key aspects of any proposal had been satisfactory, that the price at which the Board of AstraZeneca would be prepared to provide a recommendation would have to be more than 10% above the level contained in Pfizer's Friday Proposal.
The Final Proposal is a minor improvement which continues to fall short of the Board's view of value and has been rejected."
But importantly #Astrazeneca now names it's price . Chairman says willing to consider anything above £59 a share. #Pfizer
7.17am BST
AstraZeneca says it rejected Pfizer's £69bn offer because of the risk a takeover would pose to its pharmaceutical work, and the uncertainty it would create, as well as on price grounds.
The company says last night's Final Proposal "falls short of AstraZeneca's value as an independent science-led company.
AstraZeneca has excellent momentum in the delivery of its clearly defined strategy, underpinning the Board's confidence in the Company's long term revenue targets and profitability
Pfizer's proposals bring uncertainty and risks for AstraZeneca shareholders
7.12am BST
Breaking: AstraZeneca has just told the City that it has rejected Pfizer's increased offer of £55 per share, declaring that it fails to recognise its full value.
7.11am BST
Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.
The City is on tenterhooks this morning, after Pfizer raised its takeover offer for AstraZeneca last night, and sweetened the cash component of the deal.
If you missed it, last night was a big one for buyout moves: #Pfizer offered £69.4bn for #AstraZeneca & AT&T agreed $48.5bn bid for DirecTV.
Day 243 of the Pfizer/AstraZeneca story. At least, it's starting to feel like that.
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