Pfizer lost its AstraZeneca bid purely on price, CFO says. What else?

Pfizer CFO Frank D'Amelio

Want to know why the potential Pfizer-AstraZeneca marriage failed? Price, says Pfizer ($PFE) CFO Frank D'Amelio. Stating the obvious, obviously. But in balking at Pfizer's offer, AstraZeneca ($AZN)--and allies in the U.K.--raised plenty of other issues. Emotional issues, for some.

So when D'Amelio says that the deal collapsed on price alone, that's saying something. That's saying that British politicians' outrage about the inevitable job cuts didn't matter. That Parliamentary hearings were mere theater. That AstraZeneca's starry-eyed financial defense didn't sway its shareholders; that Pfizer's tax-break reasons for the deal--condemned at the time--weren't an issue in the end. And that executive egos played no role in the back-and-forth.

"In a word it was price," D'Amelio told Bloomberg. "Any other issues that were raised during negotiations and conversations I think we were able to adequately, effectively address those."

Pfizer CEO Ian Read

Last month, AstraZeneca rejected Pfizer twice, amid plenty of outcry about cost cuts, job losses, suffering science and delayed drug development. Behind the scenes, Pfizer CEO Ian Read and his team jockeyed for position against AstraZeneca Chairman Leif Johansson, CEO Pascal Soriot and its board. Each side was offended by the other at one point or another. And when Pfizer rolled out its "final" offer of £55 per share toward the end of May--a bid worth some $117 billion--AstraZeneca said no go. 

Of course, D'Amelio's claim is Pfizer's side of the story. He might be laying the PR groundwork for a second run at AstraZeneca after the 6-month waiting period required by British law. He wouldn't tell Bloomberg whether Pfizer will make such a move when the time comes.

But when it comes right down to it, D'Amelio actually is stating the obvious. Of course. AstraZeneca's board did name its figure--some £59 per share, at least 10% more than Pfizer's first £53.50 offer. Meeting that price could have quashed the other arguments and soothed executive nerves.

But D'Amelio told Bloomberg that Pfizer had set a ceiling for how much it would pay--and wouldn't surpass it. Presumably, that ceiling was below AstraZeneca's demand.

- read the Bloomberg article

Special Reports: Top 10 pharma companies by 2013 revenue - Pfizer -AstraZeneca

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