After first contact in November 2013, Pfizer made an initial indicative bid approach to AstraZeneca to make an offer for the company in January 2014. That process became bogged down in what was characterised as a refusal by AstraZeneca to talk to Pfizer. As the headline number bandied around by Pfizer went from £46.61 a share to £50, and finally to £55, the disconnection between the press headlines and the underlying nature of the talks taking place became ever more apparent.

Amid the furore surrounding Pfizer’s approach to AstraZeneca, we made a public statement to the effect that “as long-term shareholders, we continued to be supportive of the AstraZeneca board”. Our position and statement of support for the board of AstraZeneca was not a rejection of the possibility of a deal, but rather an endorsement of how, in contrast to the press coverage, we thought the AstraZeneca board had actually been handling the approach from Pfizer. The prospective transaction was surrounded by considerable ‘noise’, as well as press reporting that appeared to have been partly orchestrated against AstraZeneca (i.e. suggesting that the board was being unduly intransigent, would not engage and was seeking to sabotage a bid).

As expected, the underlying issues and dynamic were discussed and reviewed directly with AstraZeneca’s chairman. It was our view that the criticisms being made did not fairly reflect what was happening, as we saw it, between the two companies, and we felt that there was merit in making the statement. The intended transaction would have been a complicated and contentious one, with significant issues surrounding it, including multi-jurisdictional political, tax and regulatory issues. Such issues can have material implications for the assessment of an offer, generating risks and requiring clarifications and assurances. This is particularly true where the consideration is other than in cash, as it was in this case.

We expect boards to consider and engage on approaches that are made on the basis of both shareholders’ best interests and proper due diligence, particularly before making a recommendation. Where boards are seeking to do so, we are inclined to support them, which is the position we took in relation to AstraZeneca. Our discussions with AstraZeneca have continued, despite the fact that Pfizer has essentially ruled itself out of further discussions for six months, as the business’s plans and strategy remain of considerable interest.