UK lawmakers give Pfizer stick as it waves carrot at AstraZeneca

Tue May 13, 2014 9:44am EDT
 
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By Ben Hirschler and Kate Holton

LONDON (Reuters) - U.S. drugmaker Pfizer hinted it could raise its proposed $106 billion offer if AstraZeneca would only engage in talks, as its boss was grilled by UK lawmakers on his commitment to British research spending and jobs.

In response AstraZeneca said it would have to consider a compelling offer but accused Pfizer of an "opportunistic" proposal and a ploy to cut taxes that risked its reputation.

Pascal Soriot, the French-born boss of AstraZeneca, came out fighting after Pfizer's Chief Executive Ian Read made clear the New York-based group would not rule out a hostile bid if Britain's second-biggest drugmaker did not enter merger talks.

Having warned that AstraZeneca could wither without its financial muscle, Pfizer expressed its frustration at being rebuffed, and said on Tuesday that working with the UK company's board could help deliver "optimal deal terms" which AstraZeneca could recommend to its shareholders.

Soriot - who appeared after Read to answer questions from a parliamentary select committee - said Pfizer's proposal risked disrupting its research and delaying getting life-saving new drugs to market, as well as undervaluing the business.

"What will we tell the person whose father died from lung cancer because one of our medicines was delayed - and essentially was delayed because in the meantime our two companies were involved in saving tax and saving costs?" he asked.

Pfizer's plan to cut its tax bill by re-domiciling to Britain if it buys AstraZeneca also posed a reputational risk, Soriot added.

"The proposed tax inversion structure, we are afraid, could generate substantial controversy and potentially delay this merger and potentially impact the reputation of our company."   Continued...

 
Ian Read, Chairman and Chief Executive of Pfizer Inc., arrives at Portcullis House to attend a parliamentary business and enterprise committee hearing on the future of AstraZeneca, in central London, May 13, 2014. REUTERS/Neil Hall