Soriot's Teva Appointment Unlikely, Says Activist Investor
Teva’s board was surprised to learn AstraZeneca's CEO Pascal Soriot will not be joining the company. Teva activist investor Benny Landa called an early report on Teva's negotiations with Mr. Soriot "devastating"
CEO of pharmaceutical company AstraZeneca, Pascal Soriot, is under pressure as of Thursday, to reverse his decision to join Israeli Teva Pharmaceutical Industries, and remain with the Anglo-Swedish drugmaker, said several people familiar with the matter on conditions of anonymity.
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Following Calcalist reports on Soriot’s talks with Teva’s board, Teva and AstraZeneca shares traded with high volatility.
Mr. Soriot did little to clarify the uncertainty. Ever since last Wednesday, when Calcalist revealed his handshake-agreement with Teva’s chairman, Sol Barer, on taking the helm at the Israeli drugmaker, the highly esteemed chief executive has remained tight-lipped and refused to respond to questions from the media.
AstraZeneca CEO Pascal Soriot
Reports about the agreement triggered a slide in AstraZeneca’s share value, and launched a campaign on part of the company’s board and shareholders to get Mr. Soriot to remain with AstraZeneca, several people familiar with the matter said.
On Friday, Bloomberg reported that Mr. Soriot would remain with AstraZeneca, after the drugmaker announced he would be hosting a call with analysts on the company’s second quarter earnings. The report cited people at AstraZeneca, who said that business is as usual and that according to people within the company, Mr. Soriot will remain with AstraZeneca for the foreseeable future.
Over the weekend, Mr. Soriot spoke to Teva and conveyed he was reconsidering his position in light of pressure to remain with AstraZeneca, people familiar with the matter said. Teva negotiated with Mr. Soriot for three months but the parties signed no documents whatsoever after the handshake agreement. However, over the past weeks Mr, Soriot made several appearances before Teva’s board and made his vision-pitch for the company’s recovery, these people said.
The pressure on Mr. Soriot to remain with AstraZeneca comes from the company’s board and chairman Leif Johansson, former Volvo chairman, as well as from the company’s major shareholders led by Fidelity Worldwide Investments, these people said.
According to estimates, AstraZeneca may offer Mr. Soriot an increased compensation package if he agrees to stay on. As of last night, neither company confirmed or denied Mr. Soriot’s move.
Teva’s board was surprised to learn from the Bloomberg report of Mr. Soriot’s plans to remain with the Anglo-Swedish drugmaker. The company reiterated that it does no comment on market rumors.
Yesterday, after doubts began to surface regarding Mr. Soriot’s transition, Teva activist investor Benny Landa said that at this point, Mr. Soriot would probably not join Teva, in an interview with Calcalist. Mr. Landa called Calcalist's report about the negotiations between Teva and Mr. Soriot “devastating”, saying the development might hinder Teva’s attempt to reach an agreement with any candidate deemed worthy of the position.
“It’s hard enough to bring in a good chief executive after previous chiefs were summarily dismissed. Mr. Soriot was the perfect choice for Teva, seeing that the company has reached a point at which it should ditch generics and adopt innovation. Generics are dying out and profitability is wearing away globally,” Mr. Landa said.
Following the reports of Soriot’s decision to stay put, AstraZeneca’s and Teva’s shares switched places on Wall Street: Teva’s share, that leapt 7% in the two days since its agreement with Soriot was publicized, dipped up to 4.5% and ended the day at a 3.9% lose; AstraZeneca’s share, which lost 5.5%, ended the day on a 4.5% gain.
