Tuesday, May 20, 2014

"Well Played, AstraZeneca Directors And Officers!" Quite So. Likely My Last Words, On The Topic.

As ever, first the sober caveats: it is true that under certain rather extraordinary conditions (set out in the applicable takeover rules as they now stand in the UK), Pfizer's bid could be reignited (with a strong, steady and insistent push by the shareholders of AZ). But equally soberly, I don't think that is a remotely likely occurence, any longer. Only a sullen few AZ institutional holders have voiced disappointment over the scuppering of this would-be takeover.

It is true that as of late April, 2014, some 27 per cent of Pfizer's shareholders were also holders of AstraZeneca (but did not represent 27 per cent of AZ's outstanding shares, just holders -- of varying sizes) -- but that is a far cry from an impending full on shareholder revolt of the sort Mr. Read must have hoped he'd engender, here. It was clearly a gambit to ignite an AZ institutional shareholder revolt, with his goofy last minute £55 "take it or leave it" offer, of Sunday night. In short, and there is no other reasonable interpretation -- Mr. Read was outclassed here. Well done AstraZeneca. A bit from a great UK perspective on it all, printed in The Guardian -- do go read it all, then:

. . . .Read's naked aggression was counter-productive. "Pfizer's approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimisation," said Johansson. Fair comment. . . .

A lot can happen in half a year. The US might ban tax inversions, or make them harder to implement. Pfizer's share price might fall, or AstraZeneca's might rise on the back of good results for drugs in late-stage clinical trials.

Read's position might also come under pressure. He raised a small army of investment bankers and created a political storm on both sides of the Atlantic, but has nothing to show for his efforts despite starting as a heavy favourite. That can be career-threatening. . . .

Yes -- "pride goeth before the fall," Ian. Some six months from now, under the applicable UK rules, Mr. Read may make a new offer -- but that might well need to be around $139 billion to gain traction, at that juncture. You read it here first: if Mr. Read offers $139 billion for this same company, some seven months from today -- his board will oust him. I'd take that to the bank. Sleep well, now all you Londoners. AZ stays independent for the foreseeable future -- or at least outside Mr. Read's grasps. Word.

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