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| AstraZeneca directors unmoved by shareholder calls to reopen Pfizer talks | AstraZeneca directors unmoved by shareholder calls to reopen Pfizer talks |
| (about 14 hours later) | |
| AstraZeneca's directors remained defiant on Wednesday night in the face of calls from one of the drugs company's biggest shareholders to reopen talks with its unwanted suitor, the US-based Pfizer group. | AstraZeneca's directors remained defiant on Wednesday night in the face of calls from one of the drugs company's biggest shareholders to reopen talks with its unwanted suitor, the US-based Pfizer group. |
| With less than five days left until the 5pm deadline on Monday when Pfizer has to table a firm offer or walk away for six months, AXA Investment Managers and Legal & General expressed disappointment with AstraZeneca's refusal to negotiate with its US rival. | With less than five days left until the 5pm deadline on Monday when Pfizer has to table a firm offer or walk away for six months, AXA Investment Managers and Legal & General expressed disappointment with AstraZeneca's refusal to negotiate with its US rival. |
| While Astra's management were hoping that their rejection of Pfizer's increased £55-a-share bid proposal, tabled on Sunday, would end the US group's ambitions, some investors in the Anglo-Swedish company remain keen for a deal to be agreed. | While Astra's management were hoping that their rejection of Pfizer's increased £55-a-share bid proposal, tabled on Sunday, would end the US group's ambitions, some investors in the Anglo-Swedish company remain keen for a deal to be agreed. |
| "The hedge funds are screaming," a banker working on Pfizer's proposed deal said. "They were caught very flat-footed, they are underwater. They're in the gutter trying to see if there's a piece of meat and they haven't got long." | |
| There was also speculation that Elliott Associates, a US hedge fund, is building a stake in AstraZeneca. | There was also speculation that Elliott Associates, a US hedge fund, is building a stake in AstraZeneca. |
| Even though one key investor, Threadneedle Asset Management, threw its weight behind the Astra board, most of the focus in the City was on a report in the Wall Street Journal saying that Legal & General, AstraZeneca's sixth-largest shareholder with 3.4% of the UK firm, had written to AstraZeneca demanding they go back to the negotiating table. Legal & General refused to deny the report. | Even though one key investor, Threadneedle Asset Management, threw its weight behind the Astra board, most of the focus in the City was on a report in the Wall Street Journal saying that Legal & General, AstraZeneca's sixth-largest shareholder with 3.4% of the UK firm, had written to AstraZeneca demanding they go back to the negotiating table. Legal & General refused to deny the report. |
| Pfizer cannot raise its offer under UK takeover rules before Monday and has ruled out going hostile. But it is understood to be working behind the scenes to get investors to express their anger. | Pfizer cannot raise its offer under UK takeover rules before Monday and has ruled out going hostile. But it is understood to be working behind the scenes to get investors to express their anger. |
| AstraZeneca shares rose 2.6% to £44.20 amid hopes a deal could still happen this year, while investment bank UBS raised AstraZeneca's standalone value to £50 a share. | AstraZeneca shares rose 2.6% to £44.20 amid hopes a deal could still happen this year, while investment bank UBS raised AstraZeneca's standalone value to £50 a share. |
| Jim Stride, head of UK equities at AXA Investment Managers, which holds a 0.89% stake in AstraZeneca, said the board was "arguably wrong and acted too hastily to dismiss the latest proposal from Pfizer". He added: "It is the view of AXA IM UK that the board of AstraZeneca should not prevent an offer from Pfizer of £55 per share from being put to the shareholders of the company. Many shareholders – but not necessarily all – will find this an attractive offer." | Jim Stride, head of UK equities at AXA Investment Managers, which holds a 0.89% stake in AstraZeneca, said the board was "arguably wrong and acted too hastily to dismiss the latest proposal from Pfizer". He added: "It is the view of AXA IM UK that the board of AstraZeneca should not prevent an offer from Pfizer of £55 per share from being put to the shareholders of the company. Many shareholders – but not necessarily all – will find this an attractive offer." |
| Other parts of the AXA insurance group, which own at least another 3% of AstraZeneca, could share Stride's views, but the insurer refused to comment. | Other parts of the AXA insurance group, which own at least another 3% of AstraZeneca, could share Stride's views, but the insurer refused to comment. |
| Stride's statement came after Threadneedle Asset Management, with a 1.5% stake in AstraZeneca, publicly backed the board. "We feel the full implications of the proposed acquisition have not been sufficiently understood and addressed by Pfizer. The company has made notable progress under Pascal Soriot and is a strong, standalone UK business with a good product pipeline." | Stride's statement came after Threadneedle Asset Management, with a 1.5% stake in AstraZeneca, publicly backed the board. "We feel the full implications of the proposed acquisition have not been sufficiently understood and addressed by Pfizer. The company has made notable progress under Pascal Soriot and is a strong, standalone UK business with a good product pipeline." |
| Sweden's Investor AB, with a 4.1% stake, Aberdeen Asset Management, M&G, Fidelity and Neil Woodford, the influential City investor who controls a £350m stake on behalf of St James's Place, have all voiced support of AstraZeneca. Together they control more than 10% of AstraZeneca shares. | Sweden's Investor AB, with a 4.1% stake, Aberdeen Asset Management, M&G, Fidelity and Neil Woodford, the influential City investor who controls a £350m stake on behalf of St James's Place, have all voiced support of AstraZeneca. Together they control more than 10% of AstraZeneca shares. |
| Among the "rebels", Schroders, which is AstraZeneca's 12th-biggest shareholder, Schafer Cullen Capital Management, a New York-based investment firm that controls a 1.5% stake on behalf of clients, and Jupiter Asset Management have all expressed disappointment at AstraZeneca's refusal to negotiate. Those who have spoken out against the board control about 7% of AstraZeneca shares, but have not mounted a coordinated action. | Among the "rebels", Schroders, which is AstraZeneca's 12th-biggest shareholder, Schafer Cullen Capital Management, a New York-based investment firm that controls a 1.5% stake on behalf of clients, and Jupiter Asset Management have all expressed disappointment at AstraZeneca's refusal to negotiate. Those who have spoken out against the board control about 7% of AstraZeneca shares, but have not mounted a coordinated action. |
| One suggestion circulating was that they could call an extraordinary general meeting to put Pfizer's offer to a vote. The support of just 5% of holders of AstraZeneca stock is needed to call an extraordinary general meeting, but it could not take place before next Monday's deadline. | One suggestion circulating was that they could call an extraordinary general meeting to put Pfizer's offer to a vote. The support of just 5% of holders of AstraZeneca stock is needed to call an extraordinary general meeting, but it could not take place before next Monday's deadline. |
| If an EGM was held after the deadline, shareholders could force AstraZeneca to reopen talks with Pfizer in late August after the obligatory three-month cooling-off period. | If an EGM was held after the deadline, shareholders could force AstraZeneca to reopen talks with Pfizer in late August after the obligatory three-month cooling-off period. |
| Shareholders angry at AstraZeneca's refusal to engage further with Pfizer have so far outlined no specific proposals that would enable a deal to happen within the takeover rules. | Shareholders angry at AstraZeneca's refusal to engage further with Pfizer have so far outlined no specific proposals that would enable a deal to happen within the takeover rules. |
| But one possibility put forward by analysts is that AstraZeneca could recommend the £55-a-share proposal on the understanding that it would pay a big special dividend, agreed with Pfizer, when the deal completed. | But one possibility put forward by analysts is that AstraZeneca could recommend the £55-a-share proposal on the understanding that it would pay a big special dividend, agreed with Pfizer, when the deal completed. |
| Such a plan would in effect increase the payout to shareholders – but it would probably be in breach of UK takeover rules. AstraZeneca has been clear in its rejection of Pfizer's offer and a U-turn by the board appears very unlikely. | Such a plan would in effect increase the payout to shareholders – but it would probably be in breach of UK takeover rules. AstraZeneca has been clear in its rejection of Pfizer's offer and a U-turn by the board appears very unlikely. |
| As part of its defence strategy Astra Zeneca has talked up its pipeline of potential cancer treatments and predicted a 75% jump in annual revenues to more than $45bn by 2023. However, Pfizer's former top scientist John LaMattina, who spent 30 years at the New York drugmaker, questioned AstraZeneca's ability to meet its targets. "Ironically, to reach his sales target, Soriot himself may need to do a merger," he said. | As part of its defence strategy Astra Zeneca has talked up its pipeline of potential cancer treatments and predicted a 75% jump in annual revenues to more than $45bn by 2023. However, Pfizer's former top scientist John LaMattina, who spent 30 years at the New York drugmaker, questioned AstraZeneca's ability to meet its targets. "Ironically, to reach his sales target, Soriot himself may need to do a merger," he said. |
| Unions representing workers at AstraZeneca's sites in Macclesfield backed the company's rejection of the Pfizer bid and called for a meeting with Soriot to discuss job prospects. They said: "Union representatives call on the board to face down pressure from all quarters to get into negotiations with Pfizer for an agreed bid and to brace to fight any hostile bid." | Unions representing workers at AstraZeneca's sites in Macclesfield backed the company's rejection of the Pfizer bid and called for a meeting with Soriot to discuss job prospects. They said: "Union representatives call on the board to face down pressure from all quarters to get into negotiations with Pfizer for an agreed bid and to brace to fight any hostile bid." |