Pfizers calls on asset managers prove fruitless

Pfizers attempt to coax AstraZeneca’s major shareholders into forcing its board to negotiate on a potential takeover ultimately come to nothing

Pfizers calls on asset managers prove fruitless


The US company confirmed last night (26 May) that it would not be making any further proposal before the Takeover Panel deadline and is now barred from doing so for six months. The two companies can enter into fresh deal talks after three months if there is the will on both sides.

AstraZeneca’s shares have barely moved today dropping just 1.9% £42.47, reflecting the fact that a last minute resurrection of the £55 per share deal was already thought to be out of the question.

In announcing the end of its pursuit, Pfizer CEO Ian Read appeared to indicate that a higher proposal would have been possible had AstraZeneca fully engaged and provided access to non-public information. "We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us,” he said.

This may frustrate the likes of BlackRock, Schroders and AXA, who were adamant that the proposal was sufficiently attractive to warrant further engagement between the two drug makers. However this view was far from unanimous among major shareholders, at least publicly.

If fact some even publicly supported the board’s position. Neil Woodford for example, was glowing in his praise for the AstraZeneca board’s ‘resolute resistance’ in handling the matter, while Aberdeen Asset Management supported the board’s view that the proposal undervalued AstraZeneca’s prospects.

This situation in the end meant the AstraZeneca board was left with enough room to move and credibility to stick to its guns on rebuffing the approach.

BlackRock, Schroder s and AXA declined to comment.

AstraZeneca sounded bullish in its acknowledgment of Pfizer’s withdrawal. “We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company,” chairman Leif Johansson said. “We have attractive growth prospects and a rapidly progressing pipeline, in the coming months we anticipate positive news flow across our core therapeutic areas, which underpins our confidence in the long-term prospects of the business,” he added.

BlackRock, Schroders and others will be watching very carefully to see if these words are vindicated by events. Any signs that AstraZeneca is not delivering on these claims would appear likely to open the door to Pfizer taking another run at a deal.


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