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AstraZeneca Under Fire, Pfizer Clarifies Scope to Tweak Bid

LONDON (The Deal) -- The board of AstraZeneca (AZN - Get Report) on Tuesday, May 20, sustained new shareholder criticism for its decision to reject a £69.4 billion ($117 billion) bid from Pfizer  (PFE - Get Report) as the New York bidder pointed to limited wriggle room in a clarification requested by the Takeover Panel.

AstraZeneca on Monday batted away a thrice-sweetened offer worth 5,500 pence per share, breaking down into 1.747 Pfizer shares plus 2,476 pence in cash. The London group's board argued that the bid is risky and undervalues its pipeline of drugs under development. Unusually, the board also stipulated on Monday that it was looking for a price of at least 5,885 pence per share.

Schroders, a top 20 AstraZeneca shareholder with a roughly 2% stake, became at least the third institution to express "disappointment" following complaints from AXA and Jupiter Fund Management on Monday.

"Schroders notes with disappointment the quick rejection by the AstraZeneca board of the latest offer from Pfizer and the decision of the Pfizer board to draw a premature end to these negotiations by calling their latest proposal final," said Schroders' prime U.K. equity manager Sue Noffke in a statement. "As long term shareholders, we are strong believers in AstraZeneca and the potential for its innovative growth pipeline, however, given the increase in the offer we would encourage the AstraZeneca management to recommence their engagement with Pfizer, and subsequently their shareholders."

Pfizer CEO Ian Read on Monday called on AstraZeneca shareholders to lobby the British company to change its position but it's doubtful whether they can apply sufficient pressure on chairman Leif Johansson and CEO Pascal Soriot. Some, including Neil Woodford, who recently launched Woodford Investment Management, have backed the AstraZeneca board, and Aberdeen Asset Management plc on Monday said the sweetened bid still fell short.

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