Examine the stock returns for both Pfizer and AstraZeneca during the Essay

Examine the stock returns for both Pfizer and AstraZeneca during the bid process and provide possible reasons for changes in price on key dates - Essay Example 7.36). Comparing by the revenues, Pfizer is a larger company than AstraZeneca both the companies being products of the merger. Pfizer made four approaches earlier in 2014 terminating the bids in a full and final offer of 55 sterling pounds per share valuing AstraZeneca at 69 billion pounds (Battersby & Grimes 2014, p. 7.37). The current debt to equity ratio at Pfizer is at 0.49, a low and a below average industrial average. The low figure is an indication of good management of debt levels within the firm. Pfizer had a quick ratio of 2.03 demonstrating their capability to cover and settle short time liquidity needs. The gross profit of Pfizer during the bidding process span was a high figure of 85.18 percent with its net profit margin accounted at 22.92 percent. The net operating cash flow had a slight increase to $4,087 million, a figure equivalent to 6.71 percent comparable to the same quarter one year ago (US. Pharmaceuticals & Healthcare Report 2014, P.15). AstraZeneca rejected Pfizer’s final offer on grounds that the takeover may pose a risk to its pharmaceutical operations. In addition, the fear of the uncertainty that could arise led to the collapse of the bid process. It became hard for AstraZeneca to evaluate Pfizer’s final bid given the uncertainty over the total amount that Pfizer could trim off its tax bill by venturing in Britain. Pfizer offered a final bid of 69.4 billion sterling pounds, an equivalent amount to $ 117 billion terming the figures full and final. Lack of a proven parameter for evaluating a company with a growing and attractive growth prospects led to changes in prices on the final day. Pfizer failed to factor in AstraZeneca’s future prospects in terms of sales and market base. The concerns on whether Pfizer would eliminate jobs after the merger and diminish Britain’s standing in life sciences indicate the political influence