Pfizer is now expected to increase its $100 billion offer to acquire UK rival AstraZeneca after being rebuffed a second time. The company has confirmed that it approached its British rival again late last week and was again rebuffed.

The U.S. drugmaker has also confirmed it proposed a takeover to AstraZeneca in January worth £58.8 billion ($98.9 billion). If successful, the deal would be the biggest foreign acquisition of a British company and one of the largest pharmaceutical deals ever.

The U.K. pharmaceutical producer said Pfizer's suggested offer undervalued the company "very significantly," adding that Pfizer wanted to pay 70% in shares and only 30% in cash. AstraZeneca urged its shareholders to take no action and said it remained confident of its independent strategy.

Buying AstraZeneca would boost Pfizer's pipeline of cancer drugs and create significant cost and tax savings. Under British takeover rules, Pfizer has until May 26 to announce a firm intention to make an offer or back away.

Pfizer CEO Ian Read said AstraZeneca had declined to engage in talks and the U.S. group was now considering how to proceed, but he remained convinced that combining the two companies made strategic sense and would benefit AstraZeneca investors.

Most of Pfizer's past deals have been conducted on a friendly basis, including its 2009 purchase of Wyeth for $68 billion. But it has been willing to play hardball if needed, as it did in 2000 with its $90 billion purchase of U.S. rival Warner-Lambert, with which it won full ownership of cholesterol fighter Lipitor, the best-selling drug of all time.

Pfizer's declaration turns up the heat under AstraZeneca CEO Pascal Soriot, who has been in the job since Oct. 2012 and has supported an independent future for the UK group, flagging spin-offs of two noncore units as one option to create more value.

Soriot has been credited with reviving AstraZeneca's previously thin pipeline of new drugs, badly needed to offset a wave of patent expiries on older drugs. However, his overhaul - including an ambitious plan to move the company's research and corporate headquarters to Cambridge, England by 2016 - has also come under fire from some shareholders over executive pay.

Acquiring a foreign company makes sense for Pfizer as it has tens of billions of dollars accumulated through foreign subsidiaries, which, if repatriated, would be heavily taxed.

Pfizer envisages combining the two drugmakers under a new UK-incorporated holding company, although the head office and stock market listing would remain in New York. But the suggested deal has triggered worries about jobs in Britain's drug sector, viewed as a key industry by the government.

AstraZeneca has already laid off thousands of staff as it shrinks its cost base to cope with a fall in sales due to patent losses on blockbuster medicines, while Pfizer has shuttered a research site at Sandwich, in southern England.