Interesting letter from Pfizer CEO:
THE FOLLOWING LETTER WAS RELEASED BY PFIZER TODAY
PR NEWSWIRE - November 04, 1999 14:01
NEW YORK, Nov 4, 1999 /PRNewswire via COMTEX/ -- The following letter was released by Pfizer today:
November 4, 1999
Mr. Lodewijk de Vink
Chairman and CEO
Warner-Lambert Co.
201 Tabor Road
Morris Plains, NJ 07950
Dear Lodewijk:
As you know from our previous communications, my Board of Directors
and I believe firmly that Pfizer and Warner-Lambert Co., the two
fastest-growing companies in the industry, would represent a compelling
combination and excellent strategic fit, creating superior value for all
our shareholders. We have not made a definitive proposal prior to this
time as a result of the "standstill" provision in the confidentiality
agreement we entered into on March 4, 1996. Because of your announcement
today relating to the agreement with American Home Products and the
resulting release from the standstill, we are pleased to make the
following proposal.
I want to reiterate that I have repeatedly tried over the past few
weeks to discuss with you the merits of a combination between Pfizer and
Warner-Lambert. Unfortunately, our efforts have been rejected -- a
response that is particularly disappointing given the substantial success
represented by our partnership in developing and marketing Lipitor, which
both our companies have publicly acknowledged. My letters dated November
3 and October 25 -- as well as our conversation on October 27 -- clearly
demonstrated our desire to make the best possible proposal for your
company and its shareholders within the "standstill" framework we had
agreed to.
Since the standstill agreement is no longer operative, we are now
prepared to offer a tax-free merger in which your shareholders would
receive 2-1/2 shares of Pfizer common stock for each outstanding share of
common stock of Warner-Lambert. Customary and appropriate provisions will
be made for outstanding options and warrants. Based on yesterday's
closing market price, this offer represents a $96.40 per share purchase
price for each Warner-Lambert share, a premium of 30% over the last
month's average closing price of your shares. This $82.4 billion offer
represents a very substantial premium over the proposed AHP transaction as
well. In addition, our proposal envisions combining the Boards of both
companies. Our offer is conditioned solely on the elimination of the
egregious $2 billion "break-up fee" and the improper issuance of the stock
option which would prevent us (but not AHP) from utilizing a pooling of
interest accounting for this transaction as well as entering into the
appropriate documentation.
The Pfizer Board has approved a transaction on the terms set forth
above and we are prepared to move expeditiously to definitive agreements.
A transaction with us offers distinct advantages to Warner-Lambert and
its shareholders. Specific strengths of this combination include:
-- The 30% premium for your shareholders over the average closing
price of your shares for the last month
-- Enhanced, truly global scale - including $4 billion in combined R&D
and $28 billion in combined revenues
-- Complementary and broadly-diversified therapeutic pipelines
-- The opportunity to achieve at least $1.2 billion in cost savings
and efficiencies
-- Complementary operations on which to build growth -- including
Warner-Lambert's strong OTC platform and Pfizer's powerful global
marketing and sales infrastructure
-- Opportunities to expand on our current highly successful
relationship
-- Greater growth opportunities for management and key employees
Given the demands of today's competitive environment, I hope that
Warner-Lambert would settle for nothing less than a combination with the
best possible peer: Pfizer.
Given what we could accomplish together for all our most important
constituencies, we remain surprised that you have not shown more interest
in joining forces. Nevertheless, we stand ready to meet at any time to
discuss any -- or all -- aspects of our proposed transaction.
On behalf of your shareholders, employees and all of your
constituencies, we urge you and Warner-Lambert's Board of Directors to
recognize the immediate and long-term superior value of this transaction.
Sincerely,
William C. Steere, Jr.
Chairman & CEO
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