Still not good enough – that was the response to US drugmaker Pfizer’s improved bid for Britain’s AstraZeneca.<br /><br />Its latest offer is 63 billion pounds (76.7 billion euros), but AstraZeneca’s board said that “substantially undervalues” the company, and it will not even to talk to the Americans. <br /><br />Analysts expect Pfizer will have to boost the price and believe it could try to bypass the board by going directly to the shareholders with a hostile takeover bid. <br /><br />A merger would create the world’s biggest pharmaceuticals company, boost Pfizer’s pipeline of cancer drugs, cut its tax bill and lead to significant cost savings, but could encounter competition problems.<br /><br />Promises to politicians<br /><br />The takeover, which would be the largest acquisition of a British company by a foreign business, has stirred political controversy in Britain.<br /><br />In an attempt to smooth relations with the government, Pfizer Chief Executive Ian Read wrote to Prime Minister David Cameron, promising to complete a substantial new research centre planned by AstraZeneca in Cambridge and retain a manufacturing plant in Macclesfield.<br /><br />Read also said that 20 percent of the enlarged group’s research and development workforce would be in Britain.<br /><br />Pfizer’s commitment to research is an issue because three years ago it shut most of its R&D in Britain – at the site where Viagra was invented – cutting nearly 2,000 jobs. <br /><br />UK Science Minister David Willetts said Pfizer had moved a long way in its commitments to British science and research, but the opposition Labour party was scathing about the potential deal.<br /><br />“Pfizer has a very poor record on previous acquisitions. Do we really want a jewel in the crown of British industry, our second biggest pharmaceutical firm, to basically be seen as an instrument of tax planning?” said business spokesman Chuka Umunna.<br /><br />Britain is wary of foreign takeovers because of events like Kraft Foods’s 2010 acquisition of Cadbury. The US firm promised to keep open a key Cadbury factory, but reneged on that soon after the deal was completed.<br /><br />Any eventual AstraZeneca/Pfizer deal will be studied by competition regulators around the world.<br /><br />Scrutiny could be especially intense in China since Pfizer and AstraZeneca rank No. 1 and No. 2 among multinational suppliers in the country’s prescription drug market.<br /><br />with Reuters<br /><br />..
