20th May 2014
Even the media outlets are divided. While one UK newspaper says Pfizer has walked away, another says it is hoping that pressure from investors could still see a deal pushed for and accepted.
The latter appears to be increasingly unlikely due in part to the takeover code and the fact that Pfizer cannot now make another increased offer to top its £55 a share offer. In addition, it cannot bid for another six months after the 26th May deadline.
The one last chance is indeed that Pfizer’s investors, nursing some significant overnight losses of around 11 per cent, might start to put pressure on the firm. But in reality they do not agree with each other.
We have Jupiter’s Alastair Gunn and Axa’s Richard Marwood in the ‘good to talk’ camp, some unnamed fund managers expressing off the record ‘disgust’ at AstraZeneca’s attitude, while others including a very famous name simply do not believe the offer to be high enough.
That star fund manager Neil Woodford, is just on the brink of launching his own retail fund business. He believes that the necessary level of the bid for AstraZeneca is very distant from what is on the table. Of course, Mr Woodford holds some money in the firm through the mandate he manages for St James’s Place, and he is likely to be a very significant shareholder in the next few months. For the moment, though it is his opinion that has clout not the percentage he owns. (One has to assume he may be eying that depressed stock price impatiently as we speak).
There is a lot of talk about whether AstraZeneca will now have to deliver on its promises for among things its cancer drug portfolio in the next six months or so before Pfizer returns with all guns blazing. One commentator this morning is suggesting that Pfizer could even get the stock on the cheap.
That would surely run contrary to everything that has been said by the likes of Mr Woodford and the AstraZeneca board have said in recent weeks about the business’s long term prospects.
Indeed, maybe the world has changed and perhaps the big beasts don’t always win. If you are individual investor, it may depend what sort of time horizon you have for the shares. Last week two brokers were talking of AstraZeneca being worth as much as £100 a share as the IBTimes reported. Would you have wanted jam today or in some relatively distant tomorrow?
There is nothing wrong certainly with what Jupiter and Axa said about AstraZeneca talking to Pfizer, but maybe the board judged this difficult in such a febrile atmosphere. As for disgusted of the ‘City of London’, Mindful Money would set greater store by them if we knew who they were. Meanwhile fund investors may be happy to leave it to their respective fund managers to take a position. It is interesting that they don’t all agree of course.