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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.

The counterpart to ValueAligned Management is ValueAligned Investing. It’s all about investing in separately managed accounts of stocks of great companies to help grow your wealth while fighting the effects of inflation.

To get started, contact me today at david@www.valuealigned.com or 732-800-2375.