NEW YORK (TheStreet) -- Looks like Pfizer (PFE) won't be trading its American citizenship for AstraZeneca's (AZN) U.K. tax rate anytime soon. But investors on StockTwits.com say that's just fine. There are plenty of other biotech beauties with attractive foreign tax rates.
AstraZeneca rejected a $118 billion "final offer" from Pfizer Monday morning, sending its shares down 11% in the process and boosting Pfizer's stock about 2%. In a press release, AstraZeneca chairman Leif Johansson said that Pfizer didn't value AstraZeneca's drugs and pipeline as much as its corporate tax rate as a U.K.-based company.
"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," Johansson wrote. "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."
Pfizer stood to save a billion dollars a year on taxes by reincorporating in AstraZeneca's home, by some estimates. Britain has an effective 21% corporate tax rate compared to the U.S.'s 40%, according to a KPMG study.
The rejection may be the end of the deal. Pfizer said it will not take its final offer of £55 per share ($93 per share) -- which was increased by $15.3 billion and included 12% more cash than before -- directly to the board in an attempt at a hostile takeover of the company. Pfizer's proposal expires in seven days, at 5 p.m. London time on May 26.
If avoiding high U.S. corporate taxes was truly the driving factor for pursuing a merger with a British drug company, there's plenty of foreign biotechs with attractive tax rates that Pfizer -- with its near $189 billion market cap -- could pursue, say StockTwits' users.
One name bandied about is Amarin (AMRN). The biotech firm, which has a $230 million market cap -- a drop in the bucket compared to AstraZeneca's $91.6 billion market cap -- is headquartered in Dublin. The effective corporate tax rate in Ireland is 12.5%.