Pfizer Walks Away From £69bn AstraZeneca Deal

US firm Pfizer has confirmed it will not make another offer for British pharmaceuticals group AstraZeneca as a deadline expired for it to lodge a formal bid.

Last weekend, Pfizer offered £55-a-share for AstraZeneca, valuing it at £69bn, which was rejected by its prospective merger partner.

Ian Read, chairman and CEO of Pfizer, said in a statement: "We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us. 

"As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy. 

"We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients' needs and remaining responsible stewards of our shareholders' capital."

Ian Read believes Pfizer's bid represented 'full value' for AstraZeneca

AstraZeneca investors are divided about the board's handling of the £55-a-share bid, with its shares closing on Friday at £43.28.

Last week, Schroders issued a statement criticising the actions of both companies, while Sky News revealed that BlackRock, AstraZeneca's biggest shareholder, wanted it to invite Pfizer to reopen merger talks.

Those which backed the board's stance that AstraZeneca would be stronger as a standalone business include Fidelity Investments, M&G Investments and Woodford Investment Management.

Under rules supervised by the City takeover watchdog, Pfizer will be prohibited from making a further offer for AstraZeneca for six months. 

It has said it will not make a hostile bid by going directly to AstraZeneca's shareholders.

However, the British group, which will set out further details of its cancer drug pipeline at a key industry conference in the US this week, could approach Pfizer to enter talks in three months' time.

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Taxman Investigations Rake In Record £24bn

A record £23.9bn has been collected through investigations by taxmen over the last year, official figures have revealed.

The total was an increase of £3.2bn on the previous 12-month period and £9bn on three years ago.

HM Revenue and Customs said it was nearly £1 billion above the target set by Chancellor George Osborne in his 2013 autumn statement.

More than £8bn has been raked in from large business, £1bn from criminals and £2.7bn through tackling avoidance schemes in the courts.

Exchequer Secretary to the Treasury David Gauke said: "The Government supports the hard-working, honest majority of taxpayers that play by the rules, and is determined to tackle the minority that seek to avoid paying the taxes they owe.

"We set HMRC ambitious targets to increase its yield and the figures published today demonstrate that HMRC is successfully meeting these challenges.

"It also sends a clear signal - HMRC will pursue those seeking to avoid their responsibilities and will collect the taxes that are due."

HMRC investigated the tax affairs of 237,215 people in 2012/13, compared with around 119,000 in 2011/12.

In 2013, 690 tax fraudsters and benefit cheats were convicted following probes by HMRC officials.

The number was an increase on the 477 convictions in the previous 12 months - and led to sentences totalling 355 years in prison.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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AstraZeneca 'Must Link Pay To New Targets'

By Mark Kleinman, City Editor

AstraZeneca should link future executive pay to the price that its board signalled it would be willing to sell the company for, a leading shareholder has told it in a move which intensifies the pressure on it to justify the rejection of a string of takeover bids.

Sky News has learnt that in a letter sent to the British pharmaceuticals group last week, Legal & General Investment Management (LGIM) said long-term share awards should pay out in full only if AstraZeneca's share price reaches £58.85.

That was the level at which the company has said it would be willing to discuss a takeover by Pfizer, its US rival.

Last weekend, Pfizer offered £55-a-share for AstraZeneca, valuing it at £69bn, which was rejected by its prospective merger partner.

It emerged on Wednesday that LGIM was among AstraZeneca shareholders which were disappointed by the decision to spurn Pfizer's offer, which is expected to lapse on Monday when a deadline expires for it to lodge a formal bid.

Sources said that LGIM, which owns approximately 3.5% of AstraZeneca and is its sixth-largest investor, had also called for executives' pay to be linked to a $45bn (£26.7bn) revenue forecast which was outlined by the drugs-maker's chief executive, Pascal Soriot, as part of its defence against Pfizer's approach.

LGIM's demand goes further than those of other AstraZeneca shareholders, a number of which have called for pay to be partly-determined by the shares hitting £55, the level of the most recent Pfizer offer.

"If the remuneration committee of AstraZeneca – and, indeed, any company rejecting an offer in favour of long-term independence – was to recalibrate any current and future incentives to vest only at the level of the spurned takeover, it would provide comfort to shareholders that if things do not play out as the management envisage, the executives have shared in the pain felt by shareholders at the lost opportunity," Richard Buxton, head of UK equities at Old Mutual Global Investors, wrote in a letter to the Financial Times.

AstraZeneca investors are divided about the board's handling of the bid, with its shares closing on Friday at £43.28.

Last week, Schroders issued a statement criticising the actions of both companies, while Sky News revealed that BlackRock, AstraZeneca's biggest shareholder, wants it to invite Pfizer to reopen merger talks.

Those which have backed the board's stance that AstraZeneca would be stronger as a standalone business include Fidelity Investments, M&G Investments and Woodford Investment Management.

Under rules supervised by the City takeover watchdog, Pfizer will be prohibited from making a further offer for AstraZeneca for six months if it abandons its interest. It has said it will not make a hostile bid by going directly to AstraZeneca's shareholders.

However, the British group, which will set out further details of its cancer drug pipeline at a key industry conference in the US this week, could approach Pfizer to enter talks in three months' time.

Pfizer's interest in AstraZeneca has sparked a row in Westminster about the US company's track record in research and development.

LGIM, AstraZeneca and Pfizer all declined to comment.

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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InterContinental Rebuffs Secret £6bn US Bid

By Mark Kleinman, City Editor

The FTSE-100 hospitality provider InterContinental Hotels Group (IHG) has rejected a secret takeover bid from the US which valued the company at about £6bn.

Sky News has learnt that IHG's board met a few weeks ago to consider the offer, but dismissed it on the grounds that it was too low.

The identity of the bidder was unclear this weekend, although analysts said it may have been Starwood Hotels & Resorts, the owner of the Le Meridien, St Regis and Westin brands, or a specialist investment fund such as Starwood Capital.

Sources said that IHG was braced for the bidder or a rival to return, with US hotel operators understood to be enticed by the prospect of moving their tax domicile to the UK in a process known as a tax inversion.

That mechanism, which allows US companies to avoid paying tax on their overseas cash holdings, has been at the centre of Pfizer's £69bn offer for AstraZeneca, provoking a political outcry on both sides of the Atlantic.

Senior sources said on Saturday that Pfizer was likely to issue a statement on Monday under Rule 2.8 of the City's Takeover Code, which will confirm its intention not to make a formal bid at this stage for its British pharmaceuticals rival.

Pfizer would then be barred from making another approach for six months, although as Sky News revealed this week, AstraZeneca's biggest investor is pressing it to re-open talks with the US company in three months' time.

The recent approach for IHG, which owns brands such as Crowne Plaza, Holiday Inn and its eponymous chain, could fade away and not be revived, according to insiders.

One added that IHG's stock repurchases in the last fortnight meant that it was not involved in live takeover talks.

Starwood Hotels has a market value of just under $15bn (£8.9bn), while IHG is capitalised at £5.6bn.

The British group is chaired by Patrick Cescau, a former boss of Unilever, and run by Richard Solomons, who has pleased investors with a series of large capital returns.

These have been generated by the sale of many of its flagship hotel properties, including most recently sites in San Francisco and New York, as IHG shifts its business model to hotel management rather than ownership.

IHG still owns the LeGrand Paris and InterContinental Hong Kong, but is also expected to sell these properties and return hundreds of millions of pounds more to shareholders.

It has also been accelerating the expansion of its pipeline of new hotels, with 237 locations opened last year and 444 more added to its roster of future openings.

The company operates about 5% of the world's hotel rooms but has more than twice that volume of the industry's known slate of new rooms.

Last year, IHG reported pre-tax profits of £600m, a 10% rise on the previous year.

Its future growth will be driven by emerging markets, with Hualuxe, a premium brand aimed at Chinese customers, launched in 2012.

A spokeswoman for IHG, shares in which closed up 0.3% on Friday at 2226p, declined to comment.

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RBS And NatWest Hit By Mobile Banking Glitch

Mobile banking services for RBS and NatWest have been hit by an IT glitch, along with an unconnected problem that affected some Lloyds, Halifax and Bank of Scotland online users.

In a statement given to Sky News, a spokesperson for RBS Group said: "Some customers may have had trouble getting into mobile banking today between 8.40am and 2.30pm.

"All services are back up and running as normal.  We apologise for any inconvenience this caused."

A spokesman for Lloyds Banking Group said there was a temporary issue on Friday morning that affected mobile and online services for a small number of customers who were trying to set up payments at Lloyds, Halifax and Bank of Scotland.

The apology seen by NatWest smartphones users

A Lloyds spokesman said: "We are aware that a small number of customers experienced issues accessing payments this morning.

"The issue has now been rectified and we are working with those customers who were affected."

The RBS Group has been hit be a sequence of system-wide IT failures in the past, which affected RBS, NatWest and Ulster Bank.

More recently, it has suffered 'pay day problems'  in the past, when workers expect to see funds enter their accounts.

Branch and cash machines are believed to be unaffected by the latest woes.

In its last annual results, the group said it was investing heavily in computer infrastructure to modernise its systems.

A number of banks were affected in February when workers expected funds to be deposited.

According to the British Bankers' Association, the use of mobile devices for banking services has doubled in the past 12 months.

RBS saw more than 17 million log ins in one week, through its mobile app, earlier this month.

In late December the group was hit by its fourth IT failure, after a cyber attack left online users unable to access accounts.

That followed an outage in early December, on one of the year's busiest shopping days.

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Blackstone In Joint Bid For Friends' Tax Arm

By Mark Kleinman, City Editor

The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.

Sky News understands that Blackstone and Philadelphia Financial will make a joint offer for Lombard, which specialises in wealth planning solutions for some of the world's wealthiest people.

Philadelphia Financial targets high net-worth families through a network of intermediaries, and is understood to view Lombard as an attractive opportunity to expand that area of its business.

Friends Life has been in talks to sell the division for more than six months and is understood to have set a deadline in June for offers from interested parties.

Permira, another private equity group, is also expected to lodge a bid, while interest from Warburg Pincus, another private equity firm, is said to have waned.

Responding to Sky News' disclosure of the sale plan last November, Friends Life, which was then called Resolution, said: "Resolution notes the recent speculation in the press regarding the potential disposal of its Lombard division, which comprises Lombard International Assurance S.A. and Insurance Development Holdings AG, and confirms that it is currently in discussions regarding the possible disposal.

"There is no certainty these discussions will result in a transaction being agreed. A further announcement will be made as and when appropriate."

Analysts say the Lombard unit, which is being auctioned by investment bankers at Barclays, could be sold for £400m.

Based in Luxembourg, Lombard offers "wealth planning solutions to high and ultra-high net worth individuals".

The business is viewed as non-core by Friends Life's board and a sale would see the company re-orient itself towards its home market in the UK, analysts said.

Lombard uses Luxembourg's light-touch tax regime to help shield clients' assets from the taxman and is understood to include dozens of billionaires among its key customers.

Insiders said that Friends Life was also likely to consider the sale of Friends Provident International (FPI), which provides life assurance and investment products in Asia, the Middle East and some other markets, in due course, although no sale process for that business had yet been formally planned.

FPI has offices in the United Arab Emirates, Hong Kong, Singapore and the Isle of Man, and primarily distributes through independent financial advisers and strategic partnerships.

Andy Briggs, Friends Life's chief executive, said late last year that it was planning to compete more aggressively with specialist annuity providers such as Just Retirement, which recently floated on the London Stock Exchange.

In March, it issued updated guidance on its plans in the wake of George Osborne's shake-up of the annuities market.

He said: "There is a negative implication for new business flows in the individual annuity market, as some people utilise the increased flexibility provided by the Chancellor's proposals.

"However, we believe that annuities will continue to be an important product for those who value the guaranteed income throughout increasingly long retirement periods."

Blackstone, Permira and Friends Life all declined to comment on Friday.

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Hacked eBay Faces Multiple Investigations

Web retailer eBay is facing transatlantic scrutiny from the authorities over a massive cyber attack that compromised the personal data of its 145 million users.

Connecticut, Florida and Illinois have launched a joint inquiry over the hack, which came to light on Wednesday.

The investigation will focus on the scope of the data breach and eBay's response, said Connecticut officials.

Some customers have complained in web forums and on social media that they received no email warning from eBay to change their password, only learning about the cyber attack from media.

eBay's database was compromised in late February or early March

New York state's top prosecutor, Attorney General Eric Schneiderman, has asked eBay to provide free credit monitoring for those affected.

"We are currently in conversation with eBay about that," a source in his office told Sky News.

The UK's data watchdog, the Information Commissioner, told Sky News that his team was "actively looking" at launching a formal investigation into eBay.

Christopher Graham said the privacy scare was a "wake-up call" to businesses, consumers and the Government.

He said it would be wrong to pre-empt any investigation into eBay, but pointed out that his team had previously fined Sony £250,000 ($420,000) for a data breach.

There had been no increase in fraudulent activity since the cyber attack, eBay said.

Paypal - which eBay owns - is unaffected, and it runs from a different system, according to the company.

The database was infiltrated between late February and early March by hackers who accessed the log-in details of eBay employees.

It included eBay customers' names, encrypted passwords, email addresses, physical addresses, phone numbers and dates of birth.

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BlackRock Urges AstraZeneca To Hold New Talks

By Mark Kleinman, City Editor

AstraZeneca's biggest shareholder wants the pharmaceuticals group to consider renewing talks with Pfizer about a £69bn takeover offer once a curfew period imposed by City regulators has expired.

Sky News has learnt that fund managers at BlackRock, which owns approximately 8% of AstraZeneca, have told its directors that they should re-engage with Pfizer, potentially after a three-month hiatus that is likely to come into force next week under UK takeover rules.

BlackRock, the world's biggest asset management group, is understood to have also told AstraZeneca that it agrees with its decision not to recommend a £55-a-share final offer lodged by the American drugs giant on Sunday night.

News of the firm's views comes just four days before a cut-off point for Pfizer to lodge a formal bid for AstraZeneca or walk away for six months.

BlackRock's intervention is significant, partly because it is AstraZeneca's largest shareholder but also because it is a substantial Pfizer shareholder, implying that it views a merger as possessing industrial logic.

BlackRock and AstraZeneca both declined to comment on their discussions.

AstraZeneca investors are divided about its directors' handling of Pfizer's £55-a-share proposal.

Earlier this week, Schroders, which owns 2% of the UK company, issued a statement criticising the actions of both companies:

"Schroders 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.

"As long term shareholders, we are strong believers in AstraZeneca and the potential for its innovative growth pipeline; however, given the increase in the offer we would encourage the AstraZeneca management to recommence their engagement with Pfizer, and subsequently their shareholders."

Legal & General Investment Management is also reported to have written to AstraZeneca to demand that it reconsider its rejection of the £69bn takeover proposal, a view echoed by fund managers at Axa Investment Managers.

Collectively, investors speaking for approximately 16% of AstraZeneca are understood to have urged it to engage in further talks with Pfizer, when BlackRock's holding is included.

However, a number of other large shareholders have backed the rejection of Pfizer's offer and endorsed AstraZeneca's view that its prospects are stronger as a standalone business.

Institutions supporting the UK-based company have included Fidelity Investments, Investor AB, the Swedish group which owns approximately 4%, M&G Investments and Threadneedle Investments.

Even with BlackRock's support, it appears unlikely that AstraZeneca's board will reverse its decision not to hold further talks prior to Monday's deadline.

Under Takeover Panel rules, Pfizer would be prohibited from making a further offer for AstraZeneca for six months if it abandons its interest. It has said it will not make a hostile bid by going directly to AstraZeneca's shareholders.

However, the British group could approach Pfizer to enter talks in three months' time, an approach that BlackRock and others now appear to be endorsing.

Pfizer's interest in AstraZeneca has sparked a row in Westminster about the US company's track record in research and development.

Labour has signalled that it could seek to block a deal if it wins power, and if a takeover had not been completed by the time of the next general election.

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