* Schroders urges AstraZeneca to restart talks with Pfizer
* Many investors frustrated at breakdown of takeover talks
* But Fidelity says Pfizer was not "a suitable partner"
(Adds Astra comment, share prices)
By Chris Vellacott
LONDON, May 20 Some leading AstraZeneca Plc
shareholders were at odds over whether the British drugmaker
made the right decision in rejecting Pfizer Inc's final $118
billion bid to buy the company.
Schroder Investment Management Ltd, AstraZeneca's
12th-biggest shareholder, urged the drugmaker on Tuesday
to restart takeover talks with Pfizer while Fidelity
Worldwide Investment (UK) Ltd, holder of the 18th largest stake
in Astra, backed the British company's stance.
The division highlighted a split among investors following
the collapse of a potential transaction, leaving many
shareholders frustrated at missing out on a big windfall.
Schroders said it was disappointed with "the quick rejection
by the AstraZeneca board" of an improved 55 pounds-a-share offer
and the decision by Pfizer to "draw a premature end to these
negotiations by calling their latest proposal final."
"Given the increase in the offer we would encourage the
AstraZeneca management to recommence their engagement with
Pfizer, and subsequently their shareholders," the fund manager,
which owns 2 percent of AstraZeneca, said.
Schroders' comments echoed those of other shareholders,
including Jupiter Asset Management Ltd, which were
dismayed at AstraZeneca's rejection of Pfizer's offer on Monday.
Astra said that under UK takeover rules, there could be no
further talks with Pfizer and that the U.S. drugmaker could not
privately or publicly even suggest it was willing to raise its
"final" rejected bid prior to a May 26 deadline unless a third
party made a higher offer.
"This restriction that prevents further negotiation on value
is a consequence of Pfizer's actions," AstraZeneca Chairman Leif
Johansson said in a statement.
Pfizer declined to comment on the AstraZeneca statement. The
largest U.S. drugmaker had previously said it was now up to
Astra shareholders to urge the board to reconsider Pfizer's
The deal would have created the world's biggest drugs group.
Instead, AstraZeneca's rejection triggered the biggest intra-day
slump in its shares since the creation of the company through a
merger of British and Swedish businesses in 1999.
The anger, however, was not universal.
"I think Astra did the right thing. I don't think that
Pfizer was a suitable partner," said Dominic Rossi, London-based
Fidelity's global chief investment officer for equities, arguing
the deal was motivated by Pfizer's desire to cut taxes.
"The Astra board has taken a very difficult decision. They
understood in rejecting the offer they would be criticised by
some shareholders. We will now have to wait two to three years
to see whether they were right. With a little luck they could
well be." Fidelity owns 1.2 percent of AstraZeneca, according to
Thomson Reuters data.
Anne Richards, chief investment officer at Aberdeen Asset
Management which holds 2.4 percent of the British drugmaker,
also said Pfizer's offer "certainly wasn't a knock-out."
Veteran fund manager Neil Woodford, who controls AstraZeneca
shares in funds he runs for wealth manager St James's Place
, said he was "relieved that AstraZeneca appears to have
retained its independence."
Strict British takeover rules mean the angry stalemate
between AstraZeneca and Pfizer is almost certain to end with no
deal, unless AstraZeneca's board did a U-turn and recommended
Pfizer's final offer.
AstraZeneca shares ended 0.5 percent higher in London, while
their shares on the New York Stock Exchange rose 1.7 percent
shortly before the close of trading. Pfizer shares were flat at
$29.28, also on the NYSE.
(Additional reporting by Ben Hirschler in Lodon and Bill
Berkrot in New York; Editing by Erica Billingham and Richard