Pfizer steps up pressure for Warner-Lambert deal

Suitor asks ouster of Warner directors


November 17, 1999|By BLOOMBERG NEWS

NEW YORK -- Pfizer Inc. urged shareholders of Warner-Lambert Co. yesterday to remove the company's directors as it stepped up pressure on the rival drug maker to accept a hostile takeover bid of $73 billion.

Pfizer said it will begin soliciting shareholder votes as it tries to block a $70 billion friendly merger between Warner-Lambert and American Home Products Corp. Either transaction would create the world's largest drug maker.

Warner-Lambert rejected Pfizer's bid and threatened to cancel the companies' partnership to market the cholesterol drug Lipitor, Warner-Lambert's best seller.

Pfizer answered by moving to take advantage of a weakness in Warner-Lambert's takeover defenses, through a procedure that allows shareholders to jettison the board without waiting for an annual meeting.

"Pfizer is going to do everything they can to make this happen," said Tim Ghriskey, senior portfolio Ghriskey, senior portfolio manager at Dreyfus Corp. "This is getting pretty heated and unpleasant, so I think they're going to have trouble getting Warner-Lambert to the table."

Pfizer executives met with analysts at its New York headquarters yesterday to answer concerns that its takeover bid raises questions about its ability to come up with its own blockbuster drugs to follow up on its recent successes, such as the impotence pill Viagra.

Warner-Lambert's bylaws permit removal of the board with a simple majority of 50.1 percent of shareholders' consents, Pfizer officials said.

Pfizer shares closed down $1.125 at $33.875. Warner-Lambert slipped $1.875 to $90.875, and American Homes fell 87.5 cents to $55.

Warner-Lambert and American Home officials had no comment.

Pfizer charged in a lawsuit that Warner-Lambert used unfair tactics to thwart its bid because its executives want to save their jobs. The suit seeks to knock out defensive measures, including a $2 billion breakup fee, in Warner-Lambert's merger agreement with American Home.

Pfizer Chief Executive Officer William C. Steere Jr. said the company had no plans to raise its bid. for Warner-Lambert.

"At this point, we'd be bidding against ourselves," he said. "We want to see how this plays out in the market."

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