Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Grow Up You Finance Types.
Of course the AstraZeneca outcome is good for the UK science base. The UK government spends billions on scientific research. Why should the Yanks get the benefit of it?
Track record suggests that Pfizer would sack British staff and asset-strip the IP if they bought AZ.
Now come shareholders’ recriminations. The shares were £44 before the bid and the bid was worth £55. The shareholders wanted that money.
But the shareholders’ arguments for why they should have been entitled to their dosh are couched in one-sided and threatening terms.
Instead of a reasoned analysis balancing the effect of the loss of national control over AZ with the one-off cash benefit to their customers, Schroders says it “notes with disappointment the quick rejection by the AstraZeneca board of the latest offer from Pfizer and the decision of the Pfizer board to draw a premature end to these negotiations by calling their latest proposal final.”
Schroders, which owns 2% of AZ, says it “encourages the AstraZeneca management to recommence their engagement with Pfizer and subsequently their shareholders”.
The threat is blatant – ‘we can turf you out you management johnnies – do what we want or you are out on your ears’.
Axa, Jupiter Asset Management and other investors take the same tack.
But, if they want to retain any credibility as responsible people, it’s not enough for the financial community just to say ‘we want our £11 premium now.’ These investors have to assess what the downside effect on the long-term future of the British economy would be and balance that with the short-term cash return..
As has been widely noted, the financial community seems to have learnt nothing from the crash of 2008. They showed in 2008 that they put their own profit before everything else – even national ruin – and they’re showing it again now.
If they can present a plausible case why the short-term one-off cash benefit outweighs the long-term economic and intellectual benefits to the UK, then let them have their £11. If they can’t, then the people who run these financial institutions should be shamed into abandoning their threats and their avaricious practices.
The time has gone when short-term returns can be justified whatever the long-term consequences.