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Woodford salutes Astra's 'resolute resistance' to Pfizer

Star fund manager says Astra's snub to Pfizer is good news for shareholders and the country.

 
Woodford salutes Astra's 'resolute resistance' to Pfizer

Star fund manager Neil Woodford has said he is 'relieved' pharmaceutical giant AstraZeneca (AZN) has fought off a takeover bid from US rival Pfizer, claiming the long-term future for the company now 'looks very bright indeed'.

Woodford has an AstraZeneca stake through the £3.5 billion mandate he runs for financial sales force St James's Place, and was previously one of its biggest shareholders through the Income and High Income funds he ran for Invesco Perpetual. Woodford quit Invesco last year and is in the process of launching his own fund and firm.

AstraZeneca yesterday rejected Pfizer's 'final' bid for the company of £55-per-share, sending Astra shares tumbling. 'It would appear that Pfizer's pursuit of AstraZeneca has now failed,' said Woodford.

'Yesterday's fall in AstraZeneca's share price reflects selling by those shareholders who were hoping for a deal and "risk arbitration" funds which are now exiting their positions,' he added. 'I am, however, relieved that AstraZeneca appears to have retained its independence. I applaud the board's resolute resistance of the Pfizer approach.'

Woodford said the strength of the drugs in Astra's pipeline meant resisting the bid was in shareholders' interests. He argued the renaissance of AstraZeneca under chief executive Pascal Soriot pointed to strong potential for these future products.

'Two years ago AstraZeneca's reserach and development division was languishing, riven with risk aversion following a string of late stage pipeline disappointments,' he said. 'It now boasts 19 products that are either in or entering late stage trials by the end of 2015. Each of them has the potential to deliver significantly improved patient outcomes and billions of dollars in sales.'

City rules mean that the only way a Pfizer takeover could go ahead would be for AstraZeneca shareholders to place enough pressure on its board to reconsider the offer before a deadline of next Monday.

AstraZeneca's biggest shareholders are divided over the bid. AXA Investment Managers, Schroders and Jupiter Asset Management, Astra's third, 12th and 26th biggest shareholders respectively, have criticised the company's management for opposing the bid. Aberdeen Asset Management and M&G Investments, the ninth and 25th largest have, like Woodford, backed Astra's rejection of the deal. 

10 comments so far. Why not have your say?

Jonathan

May 20, 2014 at 15:13

Long term future looks good but going from what would have been £55 to £43 is not good in the short term.

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alan franklin

May 20, 2014 at 15:30

Good riddance to the asset strippers from the States, infamous for shutting down the innovative labs and plant where Viagra was discovered at Sandwich, Kent.

This unplesant corporation, which had promised to keep the plant open, shut it down three years ago, with the loss of 2,400 jobs. Their so-called promises change with the wind.

They are even worse than the similarly tricky people from Kraft, who shut down a Cadbury factory in the UK and switched production to Poland within a short period after their takeover, which was also notable for promises to do the exact opposite.

These vast, faceless corporations are the enemies of shareholders, workers and nations - they have no loyalty to anything apart from their own bank accounts.

We hold a number of shares in AstraZeneca but are long term holders and backers. So, we are temporarily £10,000 worse off personally today. But we think longer term than that.

We are asset backers, not strippers....

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In the Dark

May 20, 2014 at 15:48

If what is reported is true and the deal is more or less dead which results in the speculators exiting and the price dropping. This should provide an opportunity for those politicos to put their money where their mouth is and back AZ through purchase of their shares, nice and cheap, bargain you could say. I somehow don't see that happening, ho well! on to the next political opportunity.

May I suggest defending free speech and property rights.

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In the Dark

May 20, 2014 at 15:51

Alan,

Top up there's a sale on.

As for Cadbury's the decamp to Poland was on the cards before Kraft came along but I can share your sentiment.

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Franco

May 20, 2014 at 15:55

Thank you to Woodford and franklin (above), for thinking long term and for the best interests of this country. I have made a note of the traitors and 2nd raters AXA, Schroder and Jupiter not to buy their funds ever again.

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Tom Mozy

May 20, 2014 at 16:18

Asset stripping is a vital part of any capitalist economy. It ensures all scare resources are put to their best and most efficient use.

Its economic fallacy to suggests that jobs should be saved at any cost. Jobs do not have an infinite price.

The owners and stakeholders of the company should decide if they each individuallty want a quick return or not, and it should not be the role of government to block or protect interests over each other.

Its the role of all corporations to maximise profits. A corporation is a legal entity run for the benefit of its shareholders. Only humans can be loyal not legal entities.

Having said that - its clear the majority of shareholders the board of directors and employee's plus other interests on the whole have rejected the offer and good for them.

Its also clear now that the market now values the company more than it did a few years ago - asset strippers have come and gone and now the market can value the prospects correctly. They are not bad if you can fight them off ;)

And if you cant fight them off they your assets deserve to be stripped and put to a better use.

We could have a system where by the govt holds all productive assets. It worked well for the millions of dead russians and chinese over the years.

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Keith Cobby

May 20, 2014 at 16:26

You can imagine a portfolio - call it the 'Patriotic Fund' - stuffed full of British Leyland, Coal etc.

Remember when it took three months to have a telephone line installed.

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J Thomas

May 20, 2014 at 17:23

As an AZN shareholder I would rather have a pot of Jam tomorrow, rather than a spoonful today.

A point rarely noted, if Pfizer believe AstraZeneca are such a great buy, they can always attempt to buy up a majority stake in the shares to 51% and own the company. Pfizer can then enjoy all the wonderful dividends I have received over many years.

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Mike V

May 20, 2014 at 21:31

For some reason I am mindful of JFK's words on becoming US president:

'Think not what your country can do for you but what you can do for your country'.

Obviously there was scope here for shareholders to make a substantial capital gain (and of course many shareholding employees and directors) but there were many serious questions raised here, as there always are when predatory bids are made. The biggest concerned the long term effects on pharmaceutical R&D in the UK, a sector in which we have a track record second to none. Think of penicillins and their marvellous 'Beechams' researched derivatives, H2 receptor antagonists and Beta-blockers to name but a few.

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JohnnyM

May 25, 2014 at 11:00

Big company takeovers are invariably made when the target is noticeably undervalued by markets. It is high time that the interests of UK PLC and its people were paramount and not of zero significance to short term profit-taking shareholders or speculators. The longer term prospects of AZN are obviously worth bidding for, as well as taking out essential competition: that's why Pfizer were in there.

Now I wonder what the reaction of the US would be if AZN or Roche made a bid for Pfizer? I suspect, like in France or Germany, the implied answer would be "Non!" or "Nicht!"

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