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View the article online at http://citywire.co.uk/wealth-manager/article/a752151

Have AstraZeneca's shareholders blown it?

by Elsa Buchanan on May 20, 2014 at 07:24

'Until then there is a chance that major AstraZeneca shareholders, many of whom Pfizer are said to have spoken to during the process so far, could encourage the AstraZeneca board to reconsider.’

While analysts at Citigroup and Deutsche Bank reiterated a 'buy'  and 'hold' rating on shares of AstraZeneca respectively last week, the latest recommendation came from Credit Suisse before the weekend, with a 'neutral rating. Societe Generale also issued a 'hold' rating on the stock.

Still, closing prices on Monday showed AstraZeneca was down 11.11% on the day at £41.21 - far from the £55 offer - down as much as 14.5% earlier. Meanwhile, the stock is still up 18.11% over one year versus 1.11% gain on FTSE 100.

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2 comments so far. Why not have your say?

CoeurDeLion87

May 20, 2014 at 09:28

There seems to be a real mess in UK Takeover rules these days. Back in the '80s when Hanson, BTR & Hawley Leisure were all aggressively active in paper/cash takeovers the rules were pretty clear. All deals had to be transparent, reported to the LSE in a timely and proficient manner and 'bids' invariably had to be communicated directly with shareholders in writing. I fear the current malaise in UK is far from equitable to ALL shareholders irrespective of size. Like many things in British society there has been a steady creep into dishonesty and stealth.

According to TV reports y'day there have been 4 bids. The first was on 5th January £46.61, then 2nd (?) May £50=, then £53.50 then Sunday's £55+. Dates and details E&OE. The first point to make is that ANY bid must be made during LSE market hours. Pfizer and their advisers, as well as AZN too, blew this outside market hours. Second point is that the 'approach' on 5th Jan was NOT relayed to market. In Redmayne-Bentley's Equity Insight of 1st May they write "Hard on the heels of XXX came confirmation of Pfizer's long rumoured bid approach for AZN" and later in same EI they write "News broke this week that....Pfizer had contacted AZN over a possible bid"

So it seems that there is a lot of confusion and shenanigans over who sees what when & why. The role of LSE & FCA is to ensure that ALL shareholders receive fair access to market and company information at all times. In big global corporate takeovers these days it would appear that institutions get unfair advantages on information.

Finally the opaque nature of Takeover Panel rules need investigating too. Further tightening of the definition of 'Indicative', 'final' and a host of other procedures need looking at.

My Twiiter conversation with Ian King of Sky y'day throws further light on this confusion-

CoeurDeLion ‏@Coeurdelion87 · 19h

What do TakeOver rules say about shifting bid from INDICATIVE to FORMAL & then unwinding FINAL bit? Answers on postcard @iankingsky

Ian King ‏@IanKingSky · 18h

@Coeurdelion87 Good question. Offer is indicative but the Panel tell me that 'Final' still means 'Final' in this instance.

Louise Cooper in her great analysis reflects "Reading through the AZN release suggests that the Board may be willing to negotiate with Pfizer if its Board is willing to move up to £58.85" and this is the same price that your article above that Garnry of Saxo mentions. Whether it's the same reference who knows?

Q. When is a bid NOT a bid and when is it indicative, non-indicative, phaseable & 'final'?

Some clarity and transparency here might just assist ALL shareholders. Takeover Panel? Treasury Select Committee? LSE? FCA? Uncle Tom Cobbly?

By the way in case anyone hasn't notice Directors dealings in Pfizer a few months ago looks like a great arbitrage.

Oh for the days of Lord Hanson!

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Gavin Palmer

May 25, 2014 at 06:58

In terms of value serial acquirers only buy cheap, so it depends whether you prefer value for the future over getting a serial takeover and financial geared system that will fall off a cliff when the party stops. Other than those playing the takeover premium for value investors I wouldn't want Pfizer and the rerating for Astra has started thanks to the publicity. All helpful. Await the efforts of the bankers to try to gain their fat fees by pushing it, wonder when they will stop as the losses mount and who leaves first?!

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