Unfortunately, my blog site was down all of yesterday and I couldn't post anything. Typical when there is something newsworthy to post.
Well, as we all know now, AZ's board quickly and decisively rejected Pfizer's latest bid -- pegged at $119 B. AZ's board said the bid did not provide adequate value for the company given its sterling pipeline of cancer molecules and its billions of dollars in expected sales over the next decade. AZ also keeps to its script that Pfizer will upset the R&D apple cart by laying off thousands of employees, and slowing down many key programs -- to the point where some patients will die waiting for a treatment that will not arrive in time.
AZ's chairman, Leif Johansson, also said that Pfizer's offer was basically all cash and stock but no vision. He complained that he never saw any plan that would make sense of the two companies merging their portfolios and other assets. He continued to characterize this as solely a tax deal. Perhaps, this will work for AZ in the long run too.
Pfizer for its part seems to have eschewed any notions of a hostile takeover, and seem genuinely disappointed that they could not at least get AZ management to the bargaining table. By terming their latest offer as "final", they also appear to have ended this round of discussions. Under UK merger law, they won't be allowed back to the bidding table for at least another 6 months.
So now it remains to be seen if Pfizer will sit waiting for 6 months and return, or move to another as yet undefined foreign target with a good tax rate, or will perhaps accelerate its break up plans to come up with yet another new iteration of the company. Stay tuned for more follow up.
Posted by Bruce Lehr May 20th 2014.