By Andrew Ward, David Oakley and George Parker
AstraZeneca’s biggest shareholder has backed the drugmaker’s efforts to resist a £63bn takeover by Pfizer even as David Cameron indicated he would not obstruct the largest foreign acquisition of a UK company.
Neil Woodford, the high- profile fund manager who manages just under 10 per cent of AstraZeneca, said it was a “classic case of short-term interests versus long-term interests. There is short-term profit for shareholders through a deal, but there is more value in this company in the long term as a single entity.”
The intervention promised to stiffen AstraZeneca’s resolve against an increased £50 per share indicative offer made by Pfizer yesterday to create the world’s largest drugmaker.
Pascal Soriot, AstraZenenca’s chief executive, said the offer substantially undervalued the potential of its improving pipeline of experimental drugs, including a new generation of promising cancer treatments.
The company’s board quickly reached a unanimous decision not to enter talks with Pfizer after meeting early yesterday to consider the offer, he said. The US drugmaker has until May 26 under takeover rules to decide whether to increase its offer to coax AstraZeneca to the table, press ahead with a hostile bid, or walk away.
The prime minister welcomed “robust assurances” from Pfizer that it would keep research and manufacturing operations in the UK after the proposed takeover , reflecting Downing Street’s cautiously positive response to the deal. In a letter to the prime minister, Pfizer said it would press ahead with AstraZeneca’s new research centre in Cambridge and keep manufacturing in Macclesfield, after Ian Read, chief executive, held talks with ministers in London this week.
However, the Labour party sharpened its rhetoric against a deal that has raised concern over the UK science base.
Chuka Umunna, shadow business secretary, said the government appeared to be “siding with Pfizer” against the UK’s second-biggest drugmaker and warned that its US suitor had a history of “asset-stripping”. He said: “Ministers . . . seem to be going over the heads of the AstraZeneca board.”
Mr Cameron and George Osborne, chancellor, have portrayed Pfizer’s plans as a symbol of UK attractiveness to inward investment and an advertisement for the coalition’s low corporate tax policies.
The US drugmaker intends to move its tax domicile to the UK if the deal goes through.
While the tax savings are widely seen as one of Pfizer’s principal motivations, Mr Woodford said he believed the main attraction was AstraZeneca’s products and science. It has a “very, very interesting pipeline of new products…. a far superior pipeline to Pfizer’s,” he said.
Other AstraZeneca shareholders signalled the increase from Pfizer’s initial £46.61 per share approach was not enough. (FT)