May 13 - Pfizer has hinted it may make a higher offer for AstraZeneca as the U.S. drugmaker's boss went into a meeting with UK lawmakers. As David Pollard reports Ian Read faced hostile questions over his proposed $106 billion play for its British rival.
Pfizer began the day by saying it's keen to 'engage' in talks with its British takeover target. Seen as a hint it is ready to up its offer from the rejected £50 a share. Then, the main feature: Pfizer chief Ian Read before a parliamentary committee. Keen to show good faith. SOUNDBITE (English) Ian Read, CEO, Pfizer, saying: ''I am here today to make those commitments, I intend to honour those commitments, the Pfizer board voted on those commitments. We will honour those commitments.'' Those include completing a new research centre, retaining a factory in Macclesfield and putting a fifth of its research staff in Britain. But not, it seems, keeping a joint Pfizer/Astra R&D budget at current levels. SOUNDBITE (English) Ian Read, CEO, Pfizer, saying: ''I do not expect the combined total will be the same, I expect it will be lower. How much lower, at this stage I cannot give a figure on that.'' Pfizer, though, remains confident the deal is doable. Like many in the markets, Mike Ingram of BGC Partners sees Astra shareholders as open to persuasion. SOUNDBITE (English) Mike Ingram, Market Analyst, BGC Partners, saying: ''The hurdles are political rather than financial. I was listening to the, Ian Read's testimony to the Business, Innovation and Skills Committee in parliament this morning, and it was extremely hostile questioning. I think that the feedback that Pfizer's had from from shareholders is, yes, of course, you know, 'name your price: is it £50, or is it £55?'.'' AstraZeneca then took its turn to explain why it was saying 'no'. Though in fact a 'no' could become a theoretical 'yes' if the offer was right. SOUNDBITE (English) Pascal Soriot, CEO, AstraZeneca, saying: ''An offer that would value the company where we, at the right value and would basically be an offer and a proposal that we would find implementable without execution risk, or with execution risk that we could manage, such an offer we would have to consider of course. So it's impossible for us to say that we would never accept any offer.'' For now, AstraZeneca sees a merger as a distraction from the business of producing new drugs. It's worried over damage that might be done to its reputation - by a merger partner seeking to cut its tax bill by re-domiciling in Britain. SOUNDBITE (English) Pascal Soriot, CEO, AstraZeneca, saying: "What will we tell the person whose father died from lung cancer because one of our medicines was delayed - and essentially was delayed because in the meantime our two companies were involved in saving tax and saving costs?" Pfizer has not ruled out making a hostile bid. Another friendly one is expected first - though it's thought likely Pfizer will see out the second day of parliamentary hearings before making it.