Even in a high-stakes deal worth almost $120 billion, one that would create the world’s biggest drugmaker, the personal details matter.

In a postmortem of the failed takeover talks between Pfizer Inc. and AstraZeneca Plc, a surprise offer, disagreement over a press release and the difference between a personal visit and a telephone chat played a big role. Chinese food had a cameo.

“It’s sometimes not just about the money but about how you play the psychological issue behind a transaction,” said Daniel Galvan, a director at investment bank GBS Finanzas in Madrid. “Pfizer could have had softer manners when approaching AstraZeneca.”

Pfizer ended its six-month effort to buy AstraZeneca yesterday following the London-based company’s May 19 rejection of its last bid of 55 pounds a share in cash and stock. While U.K. takeover law prohibits Pfizer from making a new, unsolicited offer for the next six months, the deal could be revived in three months if AstraZeneca invites talks.

In the aftermath, the recriminations have begun and questions raised about New York-based Pfizer’s tactics. In AstraZeneca’s eyes, Pfizer turned a supposedly friendly deal into a hostile one, alienating its board, according to people with knowledge of the matter who asked not to be identified.

During the conversations with AstraZeneca’s management, “they were always very courteous and listened,” Pfizer Chief Executive Officer Ian Read said in an interview with Britain’s Telegraph newspaper today. “We got the sense they definitely wanted to remain independent and simply didn’t believe we were offering them value.”

Pfizer Skeptical

For its part, Pfizer wasn’t convinced that AstraZeneca was serious about negotiating, especially near the end of the process, the people said. Given AstraZeneca’s quick rejection of prior bids, Pfizer hoped its last offer might get the U.K. firm’s shareholders to pressure the company to agree to new talks.

Representatives for Pfizer and AstraZeneca declined to comment beyond the public statements.

The negotiations began last November when Pfizer CEO Read, who turned 61 yesterday, approached AstraZeneca about a possible transaction. Pfizer would transfer its headquarters to the U.K. to gain a lower tax rate, add new cancer drugs to its pipeline and take advantage of cost reductions from overlapping operations.

By January, AstraZeneca CEO Pascal Soriot, 55, and Chairman Leif Johansson, 62, were intrigued enough to fly to New York to meet with the Pfizer head, where they gathered at The Pierre hotel overlooking Central Park. There, they received an offer of 46.61 pounds a share. While it was about 30 percent above AstraZeneca’s stock price, Soriot rejected it. Rather than pursue a deal further, Pfizerdecided to walk away, to the surprise of people close to AstraZeneca.

Changing Conditions

Over the next few months, however, the British firm reported positive news and pharmaceutical deals heated up. Soriot said in San Francisco on Jan. 14 that AstraZeneca’s revenue would rebound more quickly than analysts expected.

In April, Novartis AG agreed to buy GlaxoSmithKline Plc’s cancer drugs while selling most of the company’s vaccines division to Glaxo and its animal-health unit to Eli Lilly & Co., in an industrywide shake up. And Valeant Pharmaceuticals International Inc. offered to buy Allergan Inc., maker of the Botox wrinkle treatment.

Discussions with AstraZeneca were revived a few days later, on April 26, when Pfizer’s Read called Johansson in his native Sweden. The U.S. company pushed for a joint statement saying the drugmakers were in takeover talks. Johansson refused, saying he needed a new offer first, AstraZeneca said.

This disagreement over the press release set the hostile tone that continued in the following weeks, two of the people close to the British drugmaker said.

Irritated Feelings

“There’s a veneer of civility here, but they’re not very happy with each other,” said Julian Birkinshaw, a professor of strategy at London Business School.

Two days later, Pfizer made its interest in AstraZeneca public and on May 2, increased its bid to 50 pounds a share. AstraZeneca rejected it hours later, saying the terms “substantially undervalue” the company.

The public announcement marked the beginning of a 30-day period under U.K. law in which Pfizer had to agree to a deal or walk away. It also set off a heated political story in the U.K. that was tilting againstPfizer.

Members of Parliament expressed concern over Pfizer’s history of large transactions followed by massive firings and the shutdown of research facilities and factories. In response, Pfizer promised to locate 20 percent of its global research and development workforce in the U.K.

Cancer Drugs

The tensions between Read and Soriot were exposed in two days of hearings on May 13 and May 14 before parliamentary committees shown live on television. Soriot suggested the takeover could harm patients because the distraction would delay development of life-saving cancer drugs.

The next day’s headlines screamed that Pfizer’s takeover would cost lives, and Read had to assure lawmakers that the company wouldn’t jeopardize getting medicine to patients.

“There is absolutely no truth to any comment that some products of a critical nature would be delayed in getting to patients,” Read said. “If anything, we would accelerate that to patients.”

Read flew back to New York and, unbowed, upped his offer again, to 53.50 pounds, in a May 16 letter to Johansson.

Johansson called Read the next day and said he was willing to talk, inviting him back to London for a face-to-face meeting.

Read, who was reluctant after his last trip and worried about the risk of humiliation of traveling to London only to be rejected, suggested a conference call instead, according to people familiar with the talks.

Conference Call

AstraZeneca’s board members weren’t happy with his refusal to meet in person, viewing it as a sign thatPfizer wasn’t committed to reaching an agreement, the people said.

On Saturday May 17, members of the U.K. company’s board gathered at the offices of law firm Freshfields Bruckhaus Deringer LLP, on London’s Fleet Street, where they voted to reject the offer and informed Pfizer of their decision.

The parties held another call on Sunday, May 18, starting at 3 p.m. London time with Read and Chief Financial Officer Frank D’Amelio from Pfizer, and Johansson, Soriot and CFO Marc Dunoyer from AstraZeneca, the people said.

The 70-minute call failed to yield any agreement on price. Pfizer was reluctant to increase its 53.50-a-pound offer while AstraZeneca wanted at least 58.85, or 10 percent more, and additional guarantees.

Soon after the meeting ended, Pfizer was ready to fire off its final offer of 55 pounds a share, still below what AstraZeneca wanted but high enough to tempt some of its biggest stockholders.

Takeover Board

As it turned to evening in the U.K., though, Pfizer tried but was unable to immediately contact officials on the takeover panel, as required, to get the offer published, according to a person familiar with the company’s effort.

The panel couldn’t be immediately reached by Bloomberg News outside of regular business hours to comment on the delay.

Finally, at 9:42 p.m., Pfizer put out a press release with its “final” offer without first alerting AstraZeneca.

The British company’s executives, some huddled in their sleek glass offices near Paddington Station in London, were surprised by Pfizer’s unilateral move, Johansson said later.

At a hastily convened board meeting, the executives agreed to reject the latest bump. Staying up all night, fortified by Chinese food from nearby Pearl Liang, known for its dim sum and sea snails, the company drafted a statement with the rebuff, released at 7 a.m., before some retired to the nearby Novotel, according to people familiar with the meeting.

The 55-pound offer was a last gasp effort by Pfizer to try and win over AstraZeneca’s large shareholders, said Birkinshaw, the London Business School professor.

Tick Off

“Undoubtedly, they thought long and hard about that part of the decision,” he said. “But they have been painted as the bad guy in all this. They’ve managed to tick off the U.K. government, the U.S. government and the Swedish government, and that’s quite an unusual trick.”

U.S. policy makers were upset over Pfizer’s proposed tax move, while Sweden’s Finance Minister Anders Borg said the deal would destroy research and development jobs in Europe.

Pfizer’s CEO said the offer showed its restraint. “We have said from the beginning that we will remain disciplined in the price we are willing to pay and we will not depart from that guiding principle,” Read said in a statement May 18.

By declaring its offer final, Pfizer also effectively stalemated the talks. U.K. takeover rules bar the company from increasing the bid’s amount under most circumstances once it declares a final offer.

Different Orientations

Pfizer’s last offer was more of a formality, according to one person from the U.S. side who was party to the discussions. It was understood when it went out the deal was most likely dead, said the person. Still, the takeover panel made Pfizer put out another statement late on May 19, clarifying that under some conditions, the company could still make a deal, said that person. That stirred AstraZeneca’s shares the next day, after they fell as much as 15 percent on May 19.

The very different orientations of the two companies made it hard for a deal to be completed, according to Birkinshaw. Pfizer’s commercial outlook and history of cutting costs after acquisitions worked against it politically, while AstraZeneca could wrap itself in the mantle of science, he said.

Soriot will now need to prove he can deliver as a standalone company. AstraZeneca said on May 6 it will generate more than $45 billion in yearly revenue by 2023. Revenue last year totaled $25.7 billion.

“We welcome the opportunity to continue building on the momentum we have already demonstrated as an independent company,” Chairman Johansson said in a separate statement today in response to Pfizer’s announcement yesterday that it doesn’t intend to make an offer.

For Pfizer, no other ripe targets offer the triple benefits of a lower tax rate in the U.K., cost savings and new cancer drugs, analysts say. Read will likely return to an earlier plan to further break up what was once the world’s biggest pharmaceutical company.

“Pfizer may stick around and try to agree with AstraZeneca down the road, or just walk away, although there aren’t that many global big targets with such a good strategic fit for them like this one out there,” Galvan of GBS Finanzas said.

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