NEW YORK (TheStreet) -- AstraZeneca (AZN) thinks its worth more than $106 billion. But many investors on StockTwits.com don't agree. And they say AstraZeneca's quick rejection of Pfizer's (PFE) sweetened offer for the company could kill chances of a deal.
Shares of the pharmaceutical company opened half-a-percent lower Friday after management rejected Pfizer's improved $84.47-per-share bid for the company.
In a press release this morning, AstraZeneca Chairman Leif Johansson said that the deal, worth just over $106 billion, undervalues the company's drug pipeline.
"As such, the Board has no hesitation in rejecting the Proposal," Leif said.
Investors are concerned that Pfizer will drop its pursuit of the company rather than return with a higher offer. The new $84-per-share offer is 10% higher than Pfizer's prior $76.62 offer.
Should Pfizer drop its acquisition bid, many investors who purchased AstraZeneca shares in anticipation of a deal would be left with stock trading at a higher multiple than the market was willing to support sans acquirer interest. AstraZeneca shares are up 18% since Pfizer confirmed its renewed pursuit of the company last week.
$AZN wonder what will happen when PFE gives up on offers, AZN will then be a "bag holder" of sorts...not sure how market will respond-- tlhwn (@tlhwn) May. 2 at 07:13 AM
AstraZeneca has several drugs in late-stage clinical trials that management believes make it worth more than $106 billion. It has 14 compounds to treat various cancers, including thyroid, ovarian and leukemia, in Phase III trials. It also has four cardiovascular and metabolism drugs under development and several drugs targeting infections.
At the time of publication, the author held no positions in any of the stocks mentioned.
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