May 13 (Bloomberg) -- Pfizer Inc. Chief Executive Officer Ian Read faced increasingly hostile questioning from U.K. lawmakers today over his takeover bid for AstraZeneca Plc.
In a standing-room-only hearing, Read’s job was to convince Parliament’s skeptical Business, Innovation & Skills Committee that he plans to keep science jobs in Britain if the deal goes ahead. He was preceded by union representatives who said their legal advice was there was no way Pfizer could be held to any of its promises.
“I’m here to make those commitments, I intend to honor those commitments,” Read told an opposition Labour Party lawmaker who’d asked how he could be trusted. He went on to confirm he plans job cuts. “That’s part of being efficient.”
In response, committee members from both the governing Conservative Party and Labour interrupted him, accused him of being coached in advance of the hearing and told him he was holding back information. They asked for solid numbers on jobs, and Read told them he couldn’t give them.
Pfizer plans to sweeten the 60.4-billion-pound ($101.9 billion) bid for AstraZeneca for a second time, according to people with knowledge of the matter. Prime Minister David Cameron has said he wants it to do more to protect British jobs and science. Business Secretary Vince Cable is investigating whether the government can legally block the bid.
Read’s 81 minutes of testimony, delivered in an American-tinged accent that showed no trace of his Scottish birth, began with an opening statement about his pride in Pfizer.
“Warm words, and all very good,” said the committee chairman, Labour’s Adrian Bailey.
Bailey asked Read whether he planned to maintain spending on research. Read began what Bailey viewed as a potentially long answer.
“I asked a simple question,” Bailey interrupted him. “I’ll get there,” Read said. “Could you get there quickly?” Bailey replied. Frank D’Amelio, Pfizer’s chief financial officer, confirmed that spending would be cut.
From there, the questions became more pointed. “Your talk so far has been a lot of sales talk but very short on fact,” said Brian Binley, a Conservative member of the committee. When Read began to respond, Binley cut him off: “You answer my question, sir, don’t answer yours.”
Robin Walker, another Conservative, suggested that the proposed merger was “the last hurrah of a business model that’s fundamentally breaking down.”
Binley focused on Pfizer’s record in Sweden, where Prime Minister Fredrik Reinfeldt has said the country had “negative experiences” after the New York-based company bought Pharmacia Corp.
“I’m sure there are reasons why you broke your promises,” Binley said. “Are you concerned that you broke your promises?”
“I don’t believe we broke our promises,” Read replied.
Pressed for details about how many jobs he planned to cut and where, Read refused. “I can’t make any commitment on spending country-by-country right now,” he said, going on to remind the committee of Pfizer’s pledge to keep a fifth of the combined company’s research and development workforce in Britain. “It is a hard commitment. That’s a substantial commitment.”
Asked by Labour’s William Bain for a number, Read refused. “You know what substantial means,” he said. “You’ll know it when you see it, what substantial is.”
Read denied being a corporate raider. “We don’t make decisions lightly on jobs,” he said. “We understand the importance of jobs and families.”
Still, he said, there would be job cuts “somewhere” if the deal goes through. “What I cannot tell you is how much or how many or where.”
The closing questions went to Binley.
“I’m really trying to get under your skin,” he told Read. “I was slightly disturbed by your remark that you’re a very honorable company when so many have argued that wasn’t the case -- people who’ve been on the receiving end of your business machinations in the past.”
Toward the end of his testimony, Read produced from his pocket at Binley’s request a management tool he always carries, a coin with “Straight Talk” on one side and “Own It” on the other.
“I believe you span it this morning and got ‘Own It,’” Binley said. “Can we have straight talk?”
After the hearings, Binley was unimpressed. “He hoped to make much of the fact that he was a Brit,” he said. “But he seemed to me to be a Brit who’d spent too much time in America.”
Labour leader Ed Miliband, who has opposed the takeover, told Sky News television there are “too many unanswered questions” about the deal.
Simon Walker, the director general of the Institute of Directors lobby group, warned politicians against being overly hostile to business.
“While we expect the bosses of major companies to have a thick skin, we should be alive to the consequences of mounting a British Inquisition for those who wish to do business in what is supposed to be an open economy,” he said in an e-mailed statement. “If our politicians really want to whip up a storm around this issue, they’d be better off scrutinizing the role of institutional investors.”
For Pascal Soriot, the French-born CEO of AstraZeneca, who followed Read, the questioning was warmer, and shorter, lasting 58 minutes. Soriot warned that the disruption caused by a takeover could delay drugs getting to market. “In research, big is not necessarily beautiful,” he said.
The closest the committee came to hostility came when Binley asked when AstraZeneca might start paying tax in the U.K. again.
“That’s a great question,” Soriot began. “You’re beginning to sound a little like Mr. Read,” Binley replied.
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