Will Pfizer pay too much for AstraZeneca? (Update)

UPDATE: "In light of Pfizer's proposed (and rejected) $100 billion acquisition of AstraZeneca, and the strong chance that it will pay more and use more cash to prevail, we are lowering our credit score to 'deteriorating,' " writes analyst Carol Levenson at Gimme Credit LLC.

Pfizer's previous multibillion-dollar acquisition, of the former Wyeth, "helped somewhat with product diversification and potential synergies, but did not come close to offsetting the negative impact of the materially higher debt load and the looming loss of exclusivity for Lipitor," she added. A costly AZ deal would make it tougher for Pfizer to pay its bills, she concluded. Pfizer closed Wyeth's Malvern-area offices (now part of Vanguard Group) and part of its Collegeville complex, reducing its Philadelphia-area employment.

EARLIER: "Pfizer Inc. proposed buying AstraZeneca Plc  for about 58.8 billion pounds ($98.7 billion) in what would rank as the biggest-ever U.K. takeover and continues to be interested in a deal" even after AZ said no, says Bloomberg here.  The deal could enable Pfizer to pocket billions in profits without paying a cut to the U.S. Treasury.

AstraZeneca's US headquarters is in Fairfax, Del., on US 202 just north of Wilmington. The company in recent years has cut workers there and this year sold the southern part of the property to JPMorgan Chase & Co., which uses Delaware as a credit card center and tax shelter.

Pfizer made a lower offer last July; AstraZeneca refused. AstraZeneca rose on news of the latest offer. Adds Bloomberg: " A deal would allow Pfizer to use some $70 billion of cash it has built up overseas that would be subject to taxes if brought back to the U.S. and, because the combined company would be based in the U.K., would lead to a lower tax rate." But investors told Bloomberg that AstraZeneca won't make a deal unless Pfizer pays a lot more.