Pfizer signals open to hostile option for AstraZeneca

The Pfizer logo is seen at their world headquarters in New York April 28, 2014. REUTERS/Andrew Kelly
Ransdell Pierson and Bill Berkrot

By Ransdell Pierson and Bill Berkrot NEW YORK (Reuters) - Pfizer Inc's top officials said on Monday they are weighing all strategies, including potential hostile maneuvers, in the company's effort to seal a $106 billion takeover of British drugmaker AstraZeneca Plc. "Any option you can think of would be an option," Pfizer Chief Financial Officer Frank D'Amelio said in a telephone interview, when asked whether Pfizer might take its case directly to AstraZeneca shareholders before a May 26 deadline. That is the date by which British takeover law requires Pfizer to either make a bid for the London-based rival or walk away, unless both companies agree to seek an extension of the deadline. "What we really need is to have AstraZeneca engage with us," D'Amelio said. "We need to be able to do the right kind of analytics that need to get done," he added, referring to the ability to study the British drugmaker's books. Asked whether hostile moves could hurt integration of the two companies, Chief Executive Ian Read said, "No, in my opinion, all it does is delay the planning." Regardless of whether the deal arises from friendly negotiations or a hostile approach, it is likely to end on good terms if successfully completed, Read said. "Both companies are full of really great people that realize this is the organization they're in and they want to make it as successful as possible," he said. Pfizer on Friday raised its initial cash and stock offer from about $99 billion to $106 billion in its third effort to bring AstraZeneca management to the table. AstraZeneca quickly rejected the new bid, which said it significantly undervalued the company. Read, who said he was disappointed by the company's refusal to engage, last week met with a small number of top AstraZeneca investors in Britain to hear their views on a deal. "We listened to their shareholders and made what we thought was a compelling offer which fully valued AstraZeneca," he said. The latest offer would value AstraZeneca at about 50 pounds per share. Investors and analysts say Pfizer may need to raise its bid to 52 pounds to 55 pounds to reach a deal. Earlier on Monday, Pfizer reported disappointing first quarter sales, but slightly beat Wall Street earnings forecasts due to sharp cost cuts. Sales came in $730 million below analysts' expectations on declines for its older generic medicines and for key branded products, such as Viagra, Lipitor and Celebrex. Asked if Pfizer would pursue a different big drugmaker if its efforts to buy AstraZeneca fail, Read said, "Right now we're focused on winning on Plan A. "Are there other strategies? There's always other strategies," Read said. (Reporting by Ransdell Pierson and Bill Berkrot; Editing by Michele Gershberg, Bernadette Baum and Richard Chang)