Swelling ranks of AstraZeneca's dissident shareholders press for a Pfizer deal

AstraZeneca's headquarters in London--Courtesy of AstraZeneca

It's not over yet. Another one of AstraZeneca's ($AZN) big investors appears to have joined the rebel group demanding that the board get to the bargaining table and see where it can take Pfizer's ($PFE) latest $120 billion offer. Citing sources, The Wall Street Journal reports that Legal & General, AstraZeneca's 6th largest shareholder with a 3.5% stake in the company, wrote a letter to the board telling them they should engage in takeover talks.

The dissident investors' ranks also include AXA (4.5%), Schroders and Jupiter Fund Management, which have all gone public with their distinct displeasure over AstraZeneca's rejection of Pfizer's "final" offer. And other big investors have been quoted anonymously voicing their objections to AstraZeneca's bunker defense posture.

"It is the view of AXA IM UK that the board of AstraZeneca should not prevent an offer from Pfizer of 55 pounds ($92.67) per share from being put to the shareholders of the company," noted Jim Stride, head of UK equities at AXA Investment Managers, according to Reuters.

Lining up behind AstraZeneca's board: Neil Woodford, the influential fund manager who feels that a Pfizer takeover would damage R&D, Sweden's Investor AB (feeling protective of Sweden's remaining research hub), Fidelity and Aberdeen. Reuters adds that the big investor Threadneedle is also backing the board's rejection.

The clock is ticking. Under British takeover rules, the two have until 5 p.m. on May 26 to engage or the buyout has to go on the shelf for a 6-month waiting period before any new offers are discussed. And Pfizer says it's up to AstraZeneca's shareholders now--or never.

AstraZeneca, for its part, has been protesting that it was Pfizer's executive team that decided to make a "final" offer while dismissing an attempt at a hostile takeover. In a "clarification" issued after Pfizer's own final remarks, the U.K. pharma giant said:

"There is no possibility of any proposal at a price higher than set out in Pfizer's Final Proposal Announcement representing an indicative value of £55.00 per share being made prior to the PUSU Deadline, even with the consent or recommendation of the Board of AstraZeneca, absent the announcement of a higher competing offer by a third party." And the board already made a final, firm decision to say no to $120 billion.

But wait a sec, reports the New York Times. There is a loophole in the rules that's big enough to drive a pharma giant through it. AstraZeneca could technically support the latest £55-a-share offer while--nudge, nudge, wink, wink--waiting expectantly for the £58.85 offer it's already signalled would value the company properly.

Whatever the rules, some of the big investors clearly don't believe the game is over yet.

This wouldn't be the first time that AstraZeneca's big shareholders forced a change at the company. CEO David Brennan was forced out after investors grew increasingly restive in the face of repeated setbacks in R&D. And now some of them have their sights set on Chairman Leif Johansson and CEO Pascal Soriot, who have adamantly maintained that the company has turned the corner. It remains to be seen, though, whether the dissidents can gain enough support to force negotiations.

- here's the Wall Street Journal report (sub. req.)
- here's the Reuters story
- get the release from AstraZeneca

Editor's Corner: Angry AstraZeneca investors may hold the only key to a Pfizer deal