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AHP to sweeten bid?

This article was originally published in The Tan Sheet

Executive Summary

American Home Products will offer "additional value" to its bid for Warner-Lambert if W-L is able to secure the marketing rights to the blockbuster Rx cholesterol-reducer Lipitor, AHP says in a Nov. 30 letter to Warner-Lambert. W-L, which shares marketing rights to Lipitor with Pfizer, filed a counterclaim in Delaware chancery court Nov. 29 to end the partnership as a result of "massive and intentional breaches by Pfizer." In response, Pfizer says it has not violated any agreements and contends Warner-Lambert "has engaged in a series of desperate defensive measures." A court date on Pfizer's request to enjoin the proposed W-L/AHP merger is set for Jan. 24 (1"The Tan Sheet" Nov. 29, In Brief). W-L sent a letter to its shareholders Dec. 2 explaining the recent events and supporting a union with AHP

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Pfizer stump speech

Full-page print ad appearing in the Dec. 8 Wall Street Journal maintains Warner-Lambert shareholders are "better off with Pfizer based on all key financial measures" than under a merger with American Home Products. The message, titled "Rhetoric vs. Reality," notes Pfizer is offering $13 per W-L share, an 18% premium to AHP's bid (as of Dec. 6). "Worse still," the ad continues, "AHP is the defendant of mass tort litigation which could lead to substantial unexpected liabilities borne by Warner-Lambert shareholders." Pfizer says it will use the ad again as needed. Separately, the trial date on the Lipitor marketing agreement is set for April 10. W-L filed suit to end the joint agreement (1"The Tan Sheet" Dec. 6, In Brief)

Pfizer stump speech

Full-page print ad appearing in the Dec. 8 Wall Street Journal maintains Warner-Lambert shareholders are "better off with Pfizer based on all key financial measures" than under a merger with American Home Products. The message, titled "Rhetoric vs. Reality," notes Pfizer is offering $13 per W-L share, an 18% premium to AHP's bid (as of Dec. 6). "Worse still," the ad continues, "AHP is the defendant of mass tort litigation which could lead to substantial unexpected liabilities borne by Warner-Lambert shareholders." Pfizer says it will use the ad again as needed. Separately, the trial date on the Lipitor marketing agreement is set for April 10. W-L filed suit to end the joint agreement (1"The Tan Sheet" Dec. 6, In Brief)

Pfizer/W-L hearing

Preliminary injunction hearing date set for Jan. 24 regarding Pfizer's request to enjoin the Warner-Lambert/American Home Products proposed merger, which is set to occur May 15. In a separate complaint filed Nov. 23, Pfizer alleges W-L breached a "standstill agreement" that would compel it to accept the superior merger offer. Pfizer says the lawsuit has no effect on its ongoing Lipitor marketing agreement with W-L. In response to the complaints, Warner-Lambert asserts Pfizer is misstating the terms of the standstill agreement, which only is terminated if W-L is acquired by a third party, while the deal with AHP is a merger of equals. W-L continues to study the Lipitor agreement to decide further action

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