Some Investors feel deal won't get done

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Pascal Soriot, AstraZeneca CEO, and Ian Read, CEO of Pfizer
of AstraZeneca’s largest investors have signalled they would be willing to accept a better offer than the non-binding £50 a share proposal made by Pfizer, and are unconcerned by the political dimension that the pharmaceutical takeover battle has taken on.
Their private comments came after Ian Read, Pfizer’s chairman and chief executive, appeared before British lawmakers and spoke with some shareholders to explain the merits of a possible tie-up with the UK company.
People close to both companies say they expect Pfizer to raise its informal cash and share offer in the coming days. The deadline for an increased offer is May 26, when, under UK takeover rules, Pfizer has to make a firm bid or walk away for six months, unless AstraZeneca’s management requests talks.
However Pascal Soriot, AstraZeneca’s chief executive, continued to insist on Wednesday that the UK drugmaker has a bright independent future.

“This deal is not inevitable. We have complete confidence in our independent strategy and we are focused on delivering new drugs for patients, which will save lives and in turn will deliver real value for our shareholders,” he said.
Political opposition to the deal is growing because of fears that it will lead to job cuts in the UK.
On Wednesday, it emerged that the UK’s National Health Service has spent nearly £3bn on prescription drugs and medicines produced by AstraZeneca and Pfizer, underlining the importance of the British government as a customer of the firms.
The NHS spent £1.17bn of its £23.8bn primary care budget in the three years to 2013 with AstraZeneca and £1.7bn with Pfizer.
Lord Oakeshott, the senior Liberal Democrat peer who uncovered the figure in a parliamentary question, said the government should use its spending power as a lever to extract more assurances from Pfizer over jobs and investment.
“Solemn and binding undertakings from Pfizer without serious sanctions by government as a dominant customer would be a worthless placebo which we mustn’t swallow,” said the Lib Dem peer.
The Labour opposition party is pressing the prime minister to introduce new legislation to subject the deal to a “public interest test”, but ministers are reluctant to undermine the UK’s reputation as an open market for foreign investors.
Mr Read has done little to reassure British lawmakers over the merits of the deal in two days of questioning. But parliament is now breaking for a three-week recess and attention will turn to local and European elections later this month.
Two weeks after Pfizer made its £50-a share approach to AstraZeneca, some investors are losing faith in the idea that a deal will happen soon.
At the time of the offer, shares in AstraZeneca rallied to a little over £48. On Wednesday, they finished at £46.65, despite speculation that Pfizer could improve its offer.
The spread between Pfizer’s bid and AstraZeneca’s share price reflects both a fear that the deal will not happen and concerns over the proportion of Pfizer stock that an improved offer would include – the current bid is about two-thirds stock.
“The discount is a spread that accounts for the risk of a deal not happening and the time it would take to actually close the deal,” said Mark Schoenebaum, head of healthcare research at ISI Group.
Over the same period, Pfizer’s share price has fallen close to 5 per cent, implying doubts that it will achieve the synergies and tax savings it wants from a deal.
Additional reporting by Arash Massoudi in London