A spoonful of sugar (makes the medicine go down)

Every time I have put cursor to screen there has been another development. Financial PR is my first love and for me there is so much drama in a bid such as this (how about the fact Pfizer actually launched the bid whilst the AstraZeneca Chief Executive was on holiday in Australia – coincidence?! But the key dimension in such City activity is the importance of communication which requires the development of a compelling narrative.

Any stock exchange listed company wishing to take over another has to persuade the owners of its target that it is better placed to run that company than the existing management team. The target company has more of a decision to take about how to respond – it’s a bit like a game of chess. Firstly, the target company needs to remember that essentially any listed company is up for sale – we can all buy or sell shares if we want to. Any company facing a bid needs to remember ultimately its shareholders will decide its fate and that requires a respectful tone to any communications. That said the bid target’s management team may think the company stalking it has a point. Perhaps being part of a larger entity will help it meet its business objectives. If that is the case it is a question of getting the best price possible and that means communicating a narrative that shows what a fantastic buy it is e.g. we have great products, great ideas, great people but if you want us you are going to have to pay more. However, if it believes it is better off going it alone and thwarting the bid then the gloves come off and the bare knuckle fight begins.

What of other stakeholders such as the government and the wider community? It differs from country to country but here in the UK there is not much that can be done to stop most take-overs whoever is making the bid. But it is looking likely that what one commentator called a ‘skunk defence‘ is being mounted by someone. Pfizer’s laudable promises on the future of drug research and commitment to the UK are being steadily undermined by an increasing number of stakeholders, including, strangely, Virgin boss, Richard Branson. But perhaps the killer blow was delivered by AstraZeneca’s own Chief Executive, Pascal Soriot, who asked the Business Select Committee: “What will we tell the person whose father died from lung cancer because one of our medicines was delayed because our companies were involved in saving taxes or saving costs?” The gloves are definitely off – next move please.