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| Pfizer executives cashed in shares weeks before bid for AstraZeneca | Pfizer executives cashed in shares weeks before bid for AstraZeneca |
| (about 1 hour later) | |
| Pfizer executives made millions by cashing in their shares in the US pharmaceutical firm, just weeks before renewing a £63bn bid for AstraZeneca. | |
| Ian Read, Pfizer's chief executive and public face of the takeover bid, sold $10.6m in shares on 26 February, according to regulatory filings. Frank D'Amelio , chief financial officer, sold $8.9m of stock on the same day. Other Pfizer executives offloading shares included Loretta Cangialosi, the firm's principal accounting officer and controller, who sold $3.1m in shares on 3 March. Mikael Dolsten, the president of research and development, got rid of $2.1m worth on the same day. | Ian Read, Pfizer's chief executive and public face of the takeover bid, sold $10.6m in shares on 26 February, according to regulatory filings. Frank D'Amelio , chief financial officer, sold $8.9m of stock on the same day. Other Pfizer executives offloading shares included Loretta Cangialosi, the firm's principal accounting officer and controller, who sold $3.1m in shares on 3 March. Mikael Dolsten, the president of research and development, got rid of $2.1m worth on the same day. |
| Pfizer made its first overture to AstraZeneca's board in January, when it proposed talks for a merger. After the British-Swedish drugmaker turn down the offer, Pfizer renewed its advances on 28 April. | Pfizer made its first overture to AstraZeneca's board in January, when it proposed talks for a merger. After the British-Swedish drugmaker turn down the offer, Pfizer renewed its advances on 28 April. |
| Pfizer's share price has fallen by 9% since Read sold his for $31.99 a share in February. Its shares were trading on Friday at around $29. This is the typical result of making a takeover bid and there is no suggestion of wrongdoing by any of the executives. | Pfizer's share price has fallen by 9% since Read sold his for $31.99 a share in February. Its shares were trading on Friday at around $29. This is the typical result of making a takeover bid and there is no suggestion of wrongdoing by any of the executives. |
| A company spokesperson said: "These sales were within guidelines and during a permissible period. The executives remain in compliance with their stock ownership requirements." | A company spokesperson said: "These sales were within guidelines and during a permissible period. The executives remain in compliance with their stock ownership requirements." |
| Shishir Malde, an expert in finance and accounting at Nottingham Business School, said the share sale was not surprising. Companies bidding for a rival usually see their share price fall, reflecting market scepticism about the success of mergers, he said. | Shishir Malde, an expert in finance and accounting at Nottingham Business School, said the share sale was not surprising. Companies bidding for a rival usually see their share price fall, reflecting market scepticism about the success of mergers, he said. |
| "The vast majority of mergers and acquisitions are not successful because acquirers tend to be overconfident about how much they need to put into bringing the two companies together," said Malde. "The bigger the animal, the harder it is." | "The vast majority of mergers and acquisitions are not successful because acquirers tend to be overconfident about how much they need to put into bringing the two companies together," said Malde. "The bigger the animal, the harder it is." |
| Academic research has shown that at least 70% of big mergers and acquisitions end in failure, leaving shareholders no better off than before the tieup. | Academic research has shown that at least 70% of big mergers and acquisitions end in failure, leaving shareholders no better off than before the tieup. |
| Bidding companies, Malde said, often discover "skeletons in the closet" once the takeover is completed, which can lead them to renege on promises. In 2010 the US food firm Kraft closed Cadbury's Somerdale factory, breaking a pledge made during merger talks that it would be kept open. | Bidding companies, Malde said, often discover "skeletons in the closet" once the takeover is completed, which can lead them to renege on promises. In 2010 the US food firm Kraft closed Cadbury's Somerdale factory, breaking a pledge made during merger talks that it would be kept open. |
| Malde said there were three groups of people who always benefited from mergers: the directors of the bidding company, the shareholders of the target company and the middlemen, the bankers and lawyers. "If those three groups want it to happen, there is little anyone can do to stop it," he added. | Malde said there were three groups of people who always benefited from mergers: the directors of the bidding company, the shareholders of the target company and the middlemen, the bankers and lawyers. "If those three groups want it to happen, there is little anyone can do to stop it," he added. |
| The share sale was revealed as Sweden's government stepped up the pressure on AstraZeneca shareholders to reject Pfizer's offer. Writing in the Wall Street Journal, a trio of Swedish ministers said Pfizer's guarantees on jobs and research were insufficient. | The share sale was revealed as Sweden's government stepped up the pressure on AstraZeneca shareholders to reject Pfizer's offer. Writing in the Wall Street Journal, a trio of Swedish ministers said Pfizer's guarantees on jobs and research were insufficient. |
| "We are worried about Pfizer's semi-hostile takeover process for AstraZeneca, and what the effects would be for Sweden and the UK. The Swedish government has learned to judge companies based on what they do rather than what they say," said the article by its ministers for finance, Anders Borg, enterprise, Annie Lööf, and education and research, Jan Björklund. | "We are worried about Pfizer's semi-hostile takeover process for AstraZeneca, and what the effects would be for Sweden and the UK. The Swedish government has learned to judge companies based on what they do rather than what they say," said the article by its ministers for finance, Anders Borg, enterprise, Annie Lööf, and education and research, Jan Björklund. |
| "Pfizer has a history of quickly and sharply cutting staff in the wake of acquisitions," they wrote. Dismissing Pfizer's claim that it had created 124,000 jobs since 1999, a period when the US firm went on a buying spree that included taking over Sweden's Pharmacia in 2003, the ministers said: "The net increase in Pfizer's workforce has only been roughly 25,000 since 1999, meaning that nearly 100,000 employees have lost their jobs at Pfizer." | "Pfizer has a history of quickly and sharply cutting staff in the wake of acquisitions," they wrote. Dismissing Pfizer's claim that it had created 124,000 jobs since 1999, a period when the US firm went on a buying spree that included taking over Sweden's Pharmacia in 2003, the ministers said: "The net increase in Pfizer's workforce has only been roughly 25,000 since 1999, meaning that nearly 100,000 employees have lost their jobs at Pfizer." |
| AstraZeneca began in 1999 when Sweden's Astra merged with the UK's Zeneca, itself a descendant of the British chemical company ICI. The Anglo-Swedish firm employs 6,700 in the UK and 5,900 in Sweden. The Swedish government collects more corporation tax from AstraZeneca than any other Swedish company. | AstraZeneca began in 1999 when Sweden's Astra merged with the UK's Zeneca, itself a descendant of the British chemical company ICI. The Anglo-Swedish firm employs 6,700 in the UK and 5,900 in Sweden. The Swedish government collects more corporation tax from AstraZeneca than any other Swedish company. |
| On Thursday AstraZeneca's chief executive, Pascal Soriot, told the Guardian that the drugmaker could be damaged by Pfizer's tax avoidance plans. He also criticised Pfizer's intention to split the business into three separate divisions. | On Thursday AstraZeneca's chief executive, Pascal Soriot, told the Guardian that the drugmaker could be damaged by Pfizer's tax avoidance plans. He also criticised Pfizer's intention to split the business into three separate divisions. |