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High-Profile Acquisition

$PFE Says Price Matters, Size Doesn’t

Pfizer logo

One of the things that I look for  to determine whether a company is exhibiting ValueAligned behavior is whether or not it first says that it is willing to walk away from a high-profile acquisition due to price.

Of course, actions speak louder than words, but that insight gives us a clue as to the implicit and explicit incentives motivating decision-making.

Pfizer ($PFE), one of our largest positions, is currently engaged in a takeover battle for AstraZeneca ($AZN). CFO Frank D’Amilio publicly commits to maximizing intrinsic value as opposed to getting caught up in “completing a deal just to get bigger.”

See the blurb below from Bloomberg this morning.

June 11 (Bloomberg) — Pfizer wouldn’t comment on whether it will engage with AstraZeneca ($AZN), CFO Frank D’Amelio said during Goldman Sachs Global Healthcare Conf.

* Says PFE has “strong hand” on AstraZeneca

* PFE to continue as disciplined buyer; “mindset is agnostic to size” regarding M&A

* PFE made no decisions regarding split of company; if getting smaller creates holder value than will do it.

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