The shares in the pharmaceutical company AstraZeneca have risen by more than 14% on Monday, after the US giant Pfizer confirmed that it has an interest in a takeover bid. The UK-based drug maker has been contacted by Pfizer over a multi-billion pound bid. If this deal turns out to be successful, this would be the biggest ever takeover of a UK firm by a foreign company.
The initial offer that Pfizer made was in January 2014 and it was worth £58.8bn. However, it was rejected because according to AstraZeneca this offer seriously undervalued the firm which has more than 51,000 staff. Nevertheless, AstraZeneca pointed out that it believes that its strategy as an independent company will create significant value for shareholders on its own.
For the current offer, Pfizer said that this highly compelling opportunity may realize a significant premium and suggests considerable cash payment. Furthermore, Pfizer reassures the AstraZeneca shareholders that they will be able to have major rights in any combined company. Comparing with other pharmaceutical deals, any bid of this size is expected to come at a premium of approximately 30%, most probably on AstraZeneca’s intact share price from 17 April of £37.81. At the moment the market value of AstraZeneca is more than £50bn which means that it would cost Pfizer around £65 bn. Pfizer has enough cash and a lot of it is off-shore, so it is protected from American tax laws. However, if AstraZeneca does not engage, the bid can become unfriendly. Thus, this bid talks will be a real battle. Nevertheless, Pfizer have emphasized that it has a great respect for AstraZeneca and its proud heritage.
Pfizer thinks that the fact that AstraZeneca has refused to engage so far means that the company is considering its options right now.
AstraZeneca is indeed a global player that manufactures drugs in 16 countries. Its main focus is on treatments for diabetes, cancer, asthma, as well as antibiotics. According to its own statistics, it reported £25.7bn in sales for the past year, with £3.3bn in pre-tax profit. Only in the UK the company has eight sites with nearly 6,700 staff. However, recently the company has experienced a drop in first quarter profits, mainly due to patent losses on important medicines. In other words, the patents on some of its older medicines have expired.
Easyjet has made an official statement that it will create 2, 500 jobs and will double its presence at London Luton Airport if the Government allows expansion plans to be put into motion.
One of the goals that Easyjet has set in front of itself is to increase its passenger numbers from 4 million to 9 million in the period of one year. Also, the company is planning to include more destinations.
However, these plans partially depend on advancements that are supposed to be implemented by the airport. There are demands, coming from campaign groups who want Easyjet to be required to quiet the engines of its planes, as well as avoid night flights.
Currently, the Communities Secretary Eric Pickles is reviewing a decision which was taken at the end of 2013 by the Luton Borough Council which approved increasing airport passengers from 10 million to 18 million per year.
The work is planned to be completed by 2026 and is expected that the airport will have twenty passenger screening lanes, nine luggage reclaim belts and more retail and seating areas. All those changes are aimed to meet the prospective growth in passenger numbers.
Nevertheless, despite the review, Easyjet has signed a new 10-year deal with London Luton airport after the new owners Ardian and AENA have shown a long-term evidence of investment and a dedication to develop the site. At the moment Easyjet has 15 aircraft at the airport and 1, 600 staff. The hopes are that there will be 20% increase in capacity during the upcoming year.
The airport does not have to do a new runway in order to show a real and direct contribution to the need for more airport capacity in the South East. However, other organizations point out to the increasing noise trend at Luton Airport and demand that effective action are taken in order to tackle it. There is nothing bad in creating extra jobs and benefits to passengers but issues like noise should not be ignored. Noise is a kind of pollution and therefore, businesses that create noise have to invest in the alleviation of its effects, as well as have to constrain the hours when noise is made. It is expected that Easyjet will make specific proposals that will balance its announcements in the near future.
A sad reality for many people in the UK is the having to sell the homes they own in order to pay for social care when they become too old to care for themselves. The British Health Secretary Jeremy Hunt called it a ‘scandal’ that every year ’30,000 to 40,000 people are having to sell their houses to pay for their care costs,’ and states one in ten have care bills amounting to more than £100,000.
To answer this situation, the government proposed setting an upper limit on the cost of care at £75,000. The idea is that it would help homeowners to hold onto their homes and family’s inheritance – Nick Clegg, Deputy Prime Minister, wrote in the Sunday Telegraph that “We will make sure no one is forced to sell their home to pay for care in their lifetime, and no one sees their life savings disappear just because they developed the wrong kind of illness.”
The cap is dependent upon people having to take out health insurance of their own to enable them to pay the possible full £75,000 cost of elderly care when the times comes for it to be needed.
Nevertheless, the proposal of the cap does come at a cost to the government – in the region of a billion pounds. This is to be recovered from a freeze on Inheritance Tax at its 2009 frozen rate of £325,000. The freeze would stay in place until 2019 and would mean the tax wouldn’t rise in line with inflation.
The proposals have had a mixed response, with some praise and some criticism stating they don’t go far enough in helping meet the needs of the country’s aging population.