Four times Pfizer ($PFE) has made offers to buy AstraZeneca ($AZN) and four times, the U.K. company has said no. But the world's largest money-management firm hopes in this case no doesn't mean no. BlackRock--which owns 8% of AstraZeneca and 6.8% of Pfizer--is encouraging discussions between the two companies, according to Bloomberg, which cited anonymous sources.
As AstraZeneca's largest shareholder, BlackRock could carry considerable weight in the ongoing bidding process. To review, on Sunday Pfizer hiked its offer to a fourth and "final" figure of £55 ($92.67) a share, about $117 billion, which AstraZeneca quickly rejected. Since then, other AstraZeneca investors have stepped up to pressure the board to take the offer more seriously. Among them was Legal & General, AstraZeneca's 6th largest shareholder, which sent a letter to the board earlier this week urging takeover talks with Pfizer.
The ranks of dissenters seem to be growing. AstraZeneca shareholders AXA, Schroders and Jupiter Fund Management have all publicly blasted the company's refusal to meet Pfizer at the bargaining table. And yesterday, AstraZeneca shareholder Grantham Mayo Van Otterloo, which holds a 1.3% stake, said it wanted new talks between the two pharma giants, according to Bloomberg.
"We're very disappointed that AstraZeneca management has not agreed to terms we think are beneficial to the shareholders," Thomas Hancock, co-head of Grantham, Mayo's Global Equity group, told Bloomberg.
That's not to say all of AstraZeneca's shareholders are behind the deal. Major investor Threadneedle supports the board's rejection of the Pfizer bid, as do Sweden's Investor AB, Fidelity and Aberdeen.
Under British regulations, Pfizer and AstraZeneca have until the end of the day on May 26 to get together, or they must wait 6 months before any new offers are discussed. That said, some are now suggesting there's a loophole in those rules that would allow AstraZeneca to support the £55-a-share offer while at the same time waiting for Pfizer to come up with a better bid. So how much does AstraZeneca's board think the company is worth? The company has already signaled that £58.85 ($97.69) would be a number worth considering.
-here's the Bloomberg story