LONDON (USA TODAY) -- British drug maker AstraZeneca rejected Monday what its New York-based rival Pfizer called over the weekend its "final" takeover offer.
In a statement, AstraZeneca's board cited the "uncertainty and risks" for shareholders as a reason for the rejection, which came just hours after the maker of the erectile-dysfunction drug Viagra had upped the value of its bid to 55 pounds (around $93) a share in a deal that would have led to the world's largest drugs company.
Pfizer's latest bid that came Sunday night valued AstraZeneca at around $116 billion. It said the new offer would be its final one.
"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 minimization," Leif Johansson, AstraZeneca's chairman, said Monday.
"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."
Basil Petrides, an analyst at London-based Beaufort Securities, said that were Pfizer to now pursue a hostile takeover of AstraZeneca it would likely mean increased negative public reaction and renewed support for the latter's board of directors, who appear to have the support of shareholders.
"Pfizer may walk away now, but they do have until May 26 before they need to do so," said Petrides. "I believe Pfizer need this deal and not going away. Its business model relies on M&A and it has singled out AstraZeneca for its portfolio."
Mick Cooper, analyst at Edison Investment Research, said: "AstraZeneca will have 6 months to demonstrate that it was right to reject Pfizer's offer, or face the prospect of a fresh approach."
Pfizer has been under considerable pressure from the British government, from some lawmakers in the U.S. and from industry leaders to justify the terms of its proposed takeover. There are fears Pfizer is chiefly interested in the move as a way to reduce its corporate tax liabilities, although that idea has been publicly rebuffed by the firm's Scottish-born CEO Ian Read.
Lawmakers and technology leaders in the United Kingdom have also expressed concerns over what a deal would mean for the nation's science industry, an area it has ambitions to be a world leader in, and for what they see as the inevitable job losses that would follower any takeover.
Shares in AstraZeneca fell sharply Monday, down around 13% in mid-morning trades on the London Stock Exchange. Pfizer's pre-market shares added 2.34% in New York.