Pfizer has 'gone hostile' with direct attempt to terrify AstraZeneca's shareholders into action

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By Joel Hills: ITV News Business Editor

This morning Pfizer has "gone hostile", not with a renewed bid but with an appeal made directly to the shareholders of AstraZeneca.

Three times the board of AstraZeneca has refused to engage in discussions with a view to agreeing a price for the company.

Now Pfizer is attempting to persuade AstraZeneca's shareholders to force its management into talks.

Pfizer is attempting to persuade AstraZeneca's shareholders to force talks. Credit: JESSICA GOW / TT

The tone of the disclosures Pfizer has made are much more aggressive.

It talks, once again of the "value creation" a takeover would deliver but it also warns of the potential consequences, as it sees it, of AstraZeneca deciding to go it alone.

Pfizer calculates that AstraZeneca faces a "major loss of revenue" (up to $14 billion a year) as patents on its blockbuster drugs expire in the next few years.

A slide in sales, it helpfully points out, will make it more difficult to exploit the pipeline of new drugs in development, harder to grow the business elsewhere in the world and will ultimately squeeze the profitability of the company and its ability pay out dividends.

Pfizer has calculated a "major loss of revenue" in AstraZeneca. Credit: Graham Hughes/The Canadian Press

This is the opposite of seduction, its a pretty direct attempt to terrify AstraZeneca's shareholders into action.

The intention is clear, the timing is interesting. Pfizer has decided to bare its teeth on the very morning that its chief executive is set to appear before MPs in an attempt to persuade them that the Britain economy, the NHS has nothing to fear and everything to gain if this takeover is allowed to progress.