Woodford Blog: Will Pfizer Make Another Bid for Astra?

Media speculation is already gathering pace on the subject of whether Pfizer will return with a renewed bid – affecting not just shareholders but potentially the wider UK economy

Woodford Funds 18 November, 2014 | 1:14PM
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Morningstar's "Perspectives" series features investment insights from third-party contributors. Here, in the latest blog from the Woodford Funds website, star UK equity income fund manager Neil Woodford discusses the prospects for the Pfizer deal with AstraZeneca. 

Following its aborted takeover advances earlier this year, Pfizer (PFE) can return to make a renewed bid for AstraZeneca (AZN) once the six month ‘lock-out’ expires on November 26. Media speculation is already gathering pace on the subject of ‘will they? / won’t they?’ return with a renewed bid – it would be a big deal, in more ways the one, affecting not just shareholders but potentially the wider UK economy and healthcare patients globally.

At this stage, I suspect there is a 50/50 likelihood that Pfizer will approach AstraZeneca again. Some things have changed to make a deal less likely. The increased political opposition to ‘tax inversion’ deals, for example, where US companies buy overseas companies as a way of reducing their domestic tax obligations. This has already scuppered Abbvie’s (ABBV) proposed acquisition of Shire and some commentators suggest Pfizer’s attraction towards AstraZeneca may have cooled somewhat for the same reason.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
AbbVie Inc108.40 USD-1.00Rating
AstraZeneca PLC8,994.00 GBX-0.10Rating
Pfizer Inc42.97 USD-1.35Rating

About Author

Woodford Funds  is an investment management company founded by UK equity income specialist Neil Woodford.