Pfizer raises bid for AstraZeneca to $117 billion

LONDON (Reuters) - U.S. drugmaker PFIZER (PFE.NY)said on Sunday it had raised its offer for British rival ASTRAZENECA (AZN.LO)to 69.3 billion pounds ($116.6 billion), or 55 pounds a share.

The U.S. group said its offer was final, adding that it would not be increased. It said it would not make a hostile offer directly to AstraZeneca shareholders and would only proceed with an offer with the recommendation of the AstraZeneca board.

Pfizer also increased the cash element in its offer to 45 percent, with AstraZeneca shareholders set to receive 1.747 shares in the enlarged company for each of their AstraZeneca shares and 2,476 pence in cash.

AstraZeneca rejected an earlier approach worth 50 pounds a share on May 2, arguing it substantially undervalued the company.

Pfizer wants to create the world's largest drugs company, with a headquarters in New York but a tax base in Britain.

Two banking sources earlier described 55 pounds a share as the "magic number" at which a deal could get done.

AstraZeneca has laid out details of its pipeline of new drugs and argues there is no inevitability about a Pfizer deal, although its management also acknowledges the board would have to consider a compelling bid.

Investors have backed AstraZeneca in rejecting 50 pounds a share, but many have said they would want it to engage if Pfizer came back with an improved offer.

There has been a mounting political backlash against the proposed deal in Britain, the United States and Sweden, where AstraZeneca has half its roots.

The Swedish government launched a concerted effort on Friday against a merger it fears will lead to cuts in science jobs and research, echoing concerns aired by British lawmakers at two parliamentary hearings last week and fears for U.S. jobs in states where AstraZeneca has a large presence.

($1 = 0.5942 British Pounds)

(Editing by Larry King and Cynthia Osterman)

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