AstraZeneca management said "absent a specific and attractive proposal, it was not appropriate to engage in discussions with Pfizer" in a statement Monday morning. It described a previous offer as "significantly undervaluing" the company.
Pfizer could end up paying as much as £55 per share for AstraZeneca in one of the sector's biggest ever deals, according to analysts.
A potential $100 billion-plus merger of two of the world's biggest pharmaceutical companies appeared to have moved a step closer Monday after Pfizer confirmed it had made a second approach to its U.K. rival.
The U.S. giant needs to make a £50-£55 per share offer to get AstraZeneca management to the table, according to Mark Clark, a veteran analyst of the sector at Deutsche Bank.
"We believe there is a 90 percent probability that Pfizer acquires AstraZeneca with a take-out price of at least £49/share," Andrew Baum, pharmaceuticals analyst at Citi, wrote in a note.
According to a statement issued Monday, Pfizer first approached AstraZeneca back in January, then renewed its approach on Saturday after reports last week of the first move sent the U.K. pharmaceutical company's shares up 8 percent. Monday's confirmation of the Pfizer approach pushed AstraZeneca's shares 15 percent higher in early London trading.
Following the release of the statement, Pfizer, the world's largest pharmaceutical company in terms of sales, now seems to be taking its approach directly to AstraZeneca shareholders, promising them "a significant premium" through a cash and shares deal.
The U.S. company and maker of Viagra, initially made an offer of £46.61 ($76.62) per share for AstraZeneca, which was trading at £47 Monday morning.