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McClatchy-Tribune  08/26/2014 8:21 AM ET
Window opens for Pfizer move on AstraZeneca [Daily Mail, London :: ]

Aug. 26--US drugs giant Pfizer can today renew its ambitions to buy AstraZeneca in a pounds sterling 69bn mega-deal.

The Viagra-maker is looking for a way to slash its global tax bill by shifting its tax base out of the US.

Its initial attempts to buy Astra, Britain's second biggest pharmaceuticals group, failed earlier in the summer.

But today a three-month waiting period ends, allowing the group to have another stab at the deal.

Under UK takeover rules, Pfizer can make one take-it-or-leave-it offer in private to Astra's board.

The British firm is also allowed to invite Pfizer back to the negotiating table.

But Pfizer is not allowed to re-enter formal negotiations with Astra until November a full six months after the original deal collapsed.

Shares in Astra climbed 8pc last week to finish at 4418p although this is still a long way below the pounds sterling 55 that Pfizer offered.

Astra's board previously said it would consider a bid of pounds sterling 58.50.

Analysts still believe the deal may be resurrected, because the US group's desire to slash its tax bill is so strong.

Pfizer boss Ian Read previously said that he was 'aggressively' eyeing takeover possibilities.

But the Astra takeover met with ferocious opposition from both sides of the Atlantic. In the UK, Astra boss Pascal Soriot warned MPs the deal would cost lives, as Astra's development of cancer drugs would be stalled by the process of integrating the two firms. The Frenchman has said the company has a strong future as an independent, and has laid out a plan for reviving its fortunes.

Pfizer's overtures also faced huge political opposition, with Labour threatening to bring in a 'public interest' test for overseas takeovers if the party wins power in the general election in May.

Because a prospective deal is likely to take many months to complete given the large number of countries that would have to give regulatory clearance, Pfizer is likely to be keen to push ahead sooner rather than later.

The prospect of a multi-billion pound tax saving is still the main driver for the Astra deal, sources have said.

In the US the issue of tax inversions, where firms move their tax headquarters out of the US to avoid its 35pc tax rates, have become a fiercely political issue. President Obama has called companies that engage in tax inversions 'corporate deserters' and senior Democrats are moving to close tax loopholes as soon as possible.

Dealmakers estimate that there are between 20 and 25 US firms desperately seeking to carry out tax inversions before the window closes.

Already AbbVie has bought Shire, an Irish-based drugs group, in a pounds sterling 31bn deal that slashed the US group's tax bill by 40pc.

But a backlash against US groups that do this has already begun.

Walgreens, which is buying Boots in a pounds sterling 5bn deal, has said it will not invert its tax base in order to avoid facing a consumer boycott in the US, where it is the largest owner of beauty and drugs stores.

Astra and Pfizer both refused to comment.

 

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