Astrazeneca bid deadlock amid investor rancour

 
Michael Bow
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ASTRAZENECA and Pfizer shares rallied slightly yesterday as investors digested the impending failure of Pfizer’s £69bn takeover bid for the UK drug giant, amid distant hopes of a revival in talks later this year.

Pfizer’s £55 a share “final” offer for the company – which Astrazeneca batted away on Monday – is set to lapse at 5pm this coming Monday, forcing Pfizer to wait until November before it can make another approach.

Shares in Astrazeneca closed up 2.6 per cent and Pfizer rose just over one per cent as investors took a punt that disgruntled shareholders could force Astrazeneca to get back around the table later in the year.

Astrazeneca shareholder Legal & General is understood to have written to the Astrazeneca board urging them to engage with Pfizer. L&G declined to comment. Axa Investment, a UK arm of Axa Group, also issued a rare public criticism of the company.

“We believe that the board was arguably wrong and acted too hastily to dismiss the latest proposal from Pfizer,” head of UK equities Jim Stride said in a statement. The firms join Schroders and Jupiter in expressing dissatisfaction in Astra’s decision.

Sources close to the company dismissed the idea that disgruntled shareholders could force an emergency meeting and force management to accept a deal.

“There’s a lot of froth out there at the moment and there’s been a lot of noise. It wasn’t us, it was Pfizer who closed the store. The reality is it’s their structure – they didn’t have to go final on the offer,” a source said.

Several big fund groups, including M&G, Investor AB, Aberdeen and Woodford Investment Management, have backed the board, which could complicate any shareholder rebellion against Astrazeneca.

Market disclosures over recent days have also revealed a large number of contracts for difference being bought and sold on Astrazeneca, hinting other investors could be building CFD stakes in Astrazeneca which could be converted into equity at a later date.

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