AstraZeneca battles to get support for Pfizer rejection

AstraZeneca is battling to shore up shareholder support for its decision to resist Pfizer's £69.4bn takeover approach as the US drugmaker makes a last-ditch push to revive the stalled deal.

Both companies were engaged in intensive lobbying of investors on Wednesday with just five days to go before the deadline for Pfizer to secure AstraZeneca's backing for a deal or walk away.

Pfizer is relying on shareholders to force AstraZeneca back to the table after the UK company rejected its £55 per-share "final" offer on Monday – barring it from making a fresh approach.

British pharmaceutical company AstraZeneca's manufacturing site in Macclesfield, northwest England.
Andrew Yates | AFP | Getty Images
British pharmaceutical company AstraZeneca's manufacturing site in Macclesfield, northwest England.

Read More AstraZeneca Chair: Shareholders can 'vote me away'

The UK investment arm of Axa, the French insurance group, became the latest substantial investor to urge more talks on Wednesday, saying AstraZeneca had closed down negotiations "too hastily".

However, Threadneedle, a top 20 shareholder, lent its support to AstraZeneca in a sign that opinions remain divided.

AstraZeneca's difficulties in generating new products in the UK and getting them to market is indicative of a wider European unease, by Sarah Gordon.

People close to AstraZeneca said the company had no intention of reopening talks before the May 26 deadline, after which Pfizer would be barred under UK takeover rules from making another approach for six months.

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While acknowledging that some big shareholders were unhappy, they said an equal number had spoken out in favour of the board's position, pointing to supportive statements from Fidelity, M & G and Investor AB of Sweden.

Giving its backing to AstraZeneca, Threadneedle said: "The company has made notable progress under [chief executive] Pascal Soriot and is a strong, standalone UK business with a good product pipeline."

However a number of shareholders have privately told the UK company that any future pay should now be linked to the £55-a-share offer made by Pfizer, and the revenue targets outlined by its chief executive, Pascal Soriot, who has vowed to increase revenues by three-quarters over the next decade.

Robert Talbut, chief investment officer of Royal London Asset Management, who said he holds just under 1 per cent of AstraZeneca, said he was calling for the link of any variable pay of its management to be linked to those targets as soon as possible.

Read MoreAstraZeneca rejects Pfizer's 'final' bid

If Jim Stride is vexed by AstraZeneca's swift dismissal of a "final proposal" from Pfizer, other fund managers must be incandescent, writes Jonathan Guthrie.

"The AstraZeneca management are going to live with their decision," said Mr Talbut, who is also the chair of the influential Association of British Insurers Investment Committee. "If the board is so confident that the value of the company is above the price they rejected, then it is only fair that any future remuneration is linked to that price, and the targets they have laid down".

People close to Pfizer said momentum was building behind the push for more talks.

Jim Stride, head of UK equities at Axa Investment Managers, said "many shareholders" would find Pfizer's £55-per-share proposal "an attractive offer . . . Accordingly we believe that the [AstraZeneca] board was arguably wrong and acted too hastily to dismiss the latest proposal."

The group said Mr Stride was speaking only for Axa's UK investment arm, which owns 0.9 per cent of AstraZeneca, and not the broader group, which is the second-largest shareholder in AstraZeneca with a 5.45 per cent stake.

Schroders, a top 15 investor, and Jupiter Asset Management, a top 30 shareholder, are among others to have vented frustration at the rejection of an offer that represented a 45 per cent premium over AstraZeneca's share price before Pfizer's interest was first reported last month.

Read MoreAstraZeneca CEO: Any takeover bid would be a distraction

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