Pfizer walks away from $118 billion AstraZeneca takeover fight

LONDON/NEW YORK Pfizer abandoned its attempt to buy AstraZeneca for nearly 70 billion pounds ($118 billion) on Monday as a deadline approached without a last-minute change of heart by the British drugmaker.The decision ends a month-long public fight between two of the world's biggest pharmaceutical companies that sparked political concerns on both sides of Atlantic over jobs and corporate tax maneuvers.British rules now require an enforced cooling-off period. AstraZeneca could reach out to Pfizer after three months and Pfizer could take another run at its smaller British rival in six months time, whether it is invited back or not.Pfizer's move came two hours before a 5.00 pm (1200 ET) deadline to make a firm offer or walk away, under UK takeover rules. Its decision to quit the stage, at least for now, had been widely expected after AstraZeneca refused its final offer of 55 pounds a share."Following the AstraZeneca board's rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca," Pfizer said in a short news release.The biggest U.S. drugmaker promised it would not go hostile by taking its offer directly to AstraZeneca shareholders, leaving the fate of what would have been the world's largest ever drugs merger in the hands of its target, whose board would have had to make a complete U-turn to get a deal done."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," said Ian Read, Pfizer's chairman and chief executive.Pfizer's final offer was at a price that many analysts and investors had previously suggested would bring AstraZeneca to the table for serious negotiations. But in rejecting an earlier offer of 53.50 pounds as undervaluing the company, the British group indicated it needed a bid more than 10 percent higher, or at least 58.85 pounds per share, for its board to consider a recommendation.Pfizer had urged AstraZeneca shareholders to agitate for engagement and several expressed disappointment at its intransigence, although others - encouraged by AstraZeneca's promising drug pipeline - backed the firm's standalone strategy.AstraZeneca Chairman Leif Johansson welcomed Pfizer's decision to back down, which he said would allow the British company to focus on its growth potential as an independent company.What happens next will depend upon whether AstraZeneca's share price deteriorates in the coming weeks and how hard its shareholders push for it to revisit a deal with Pfizer. BlackRock, AstraZeneca's biggest shareholder, backed the board's rejection of Pfizer's 55 pounds a share offer, but urged it to talk again in the future.POLITICAL OPPOSITIONThe proposed transaction ran into fierce opposition from politicians in Britain, Sweden - where AstraZeneca has half it roots - and the United States over the likelihood that the marriage would lead to thousands of job cuts.Ultimately, it was price and the lack of room for eleventh-hour maneuvering by Pfizer that killed the deal. Pfizer had several reasons for taking aim at AstraZeneca for what would have been its fourth mega-merger in 14 years.Highest on the list appeared to be Pfizer's desire to take part in a recent trend of so-called tax inversions, under which it could reincorporate in Britain and pay significantly lower corporate tax. Pfizer would also be able to use tens of billions of dollars it has parked overseas, avoiding high U.S. taxes for repatriating the huge cash pile.Pfizer also had its eye on a promising portfolio of drugs in AstraZeneca's developmental pipeline, especially several potentially lucrative cancer medicines.It was this pipeline that AstraZeneca management used to make its case for Pfizer significantly undervaluing the company.Chief Executive Pascal Soriot went as far as making a 10-year forecast for a 75 percent rise in sales by 2023."As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy," Pfizer's Read said. "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."The merger would have restored Pfizer as the world's largest drugmaker by sales, a position it relinquished to Swiss-based Novartis when billions of dollars in annual revenue evaporated after its top-selling cholesterol fighter Lipitor began facing generic competition in 2011.(Editing by David Evans and Mark Potter)

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FINRA accuses broker of defrauding elderly client of $184,000

NEW YORK The Financial Industry Regulatory Authority filed a complaint on Monday accusing a New York broker of defrauding an elderly blind woman of $184,000.The Wall Street regulator said Northport, New York-based broker Hank Mark Werner began aggressively trading on the client's account after her husband died in 2012 and made more than 700 trades on 200 securities in her account over a three- year period.Based on the commissions and mark-ups Werner charged per trade, which were as high as 4.25 percent, "there was little to no possibility that the customer would profit from such trading," according to the complaint. There was no response to a call to an office given by FINRA as that of Werner's attorney. The complaint is the first step in a disciplinary proceeding. Werner could face a fine, censure or suspension from the industry. (Reporting By Elizabeth Dilts; Editing by Dan Grebler)

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Uneasy about U.S. election, rich investors eye selling stocks for cash: survey

NEW YORK A quarter of rich U.S. investors are so concerned that the U.S. presidential race will hurt share prices that they are considering pulling out of the stock market entirely, according to a survey by UBS AG Wealth Management Americas.Five percent of the 2,300 mostly high net worth investors surveyed said they had already converted all of their U.S. stock holdings to cash, according to survey of investors in early June."Investors really see this (election) as a watershed event," said Sameer Aurora, UBS head of client strategy for Wealth Management Americas. "They are extremely concerned about the outcome of the election on their own personal financial wellbeing."Unpredictable and sometimes fiery rhetoric from candidates in this year's election has given investors reason to worry. A tweet from presumptive Democratic nominee Hillary Clinton in September sent biotech stocks crashing.Republican candidate Donald Trump has promised to dismantle financial reform laws, force Canada and Mexico to renegotiate the North American Free Trade Agreement and slap steep tariffs on Chinese and Mexican imports. Investors have amassed the largest cash pile since 2001 and equity holdings are at a four-year low, a Bank of America Merrill Lynch study found. The reticence is hampering profit margins at big banks, which make money off managing clients' assets.The political leanings of the participants in the survey were evenly split between Republicans, Democrats and Independents. The vast majority of respondents, approximately 84 percent, said their No. 1 issue was the economy, citing concerns over how each candidate would address stagnating wages, consumers' purchasing power and the well-being of future generations.Despite consensus on the problem, investors split largely along party lines on how to fix the economy. Eighty-six percent of Republicans said balancing the budget would help, compared to 61 percent of Democrats and 78 percent of Independents. Overall, 57 percent of investors said they were considering changing how their investments were allocated ahead of the election, and three out of give said they plan to discuss or have already discussed the election with their advisers. The study did not ask investors which candidate they planned to vote for in November. (Reporting By Elizabeth Dilts; Editing by Carmel Crimmins and Cynthia Osterman)

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Ex-Visium hedge fund manager pleads not guilty to fraud scheme

NEW YORK A former portfolio manager at Visium Asset Management LP pleaded not guilty on Monday to charges that he engaged in a scheme to defraud investors by inflating the value of a bond fund and overstating its liquidity.Stefan Lumiere, 45, entered his plea to conspiracy, securities fraud and wire fraud charges in federal court in Manhattan, about a month after he was first arrested in connection with the investigation.The charges stemmed from a probe that has already resulted in two people pleading guilty and insider trading charges against Sanjay Valvani, a portfolio manager at Visium who committed suicide in June following his indictment.U.S. District Judge Jed Rakoff scheduled a trial for Lumiere on Dec. 19. Eric Creizman, Lumiere's attorney, outside of court said he planned to fight the charges."We're ready to go forward and do what we have to do and get him exonerated," Creizman said. The probe prompted New York-based Visium, which under founder Jacob Gottlieb came to manage about $8 billion, to last month announce it would close down its flagship fund and sell another portfolio to asset manager Alliance Bernstein.Prosecutors said that from 2011 to 2013, Lumiere and two other Visium employees participated in a scheme to each month mismark the value of securities held by a fund that invested in debt issued by healthcare companies.Prosecutors said the mismarking caused the fund's net asset value to be overstated often by tens of millions of dollars each month, resulting in higher payments to Visium and bigger bonuses for Lumiere. The scheme also had the effect of deceiving investors into believing the bonds were relatively liquid, when they actually were entirely illiquid, prosecutors said.Authorities said Lumiere's co-conspirators included Christopher Plaford, a Visium portfolio manager who oversaw the fund from its inception through its liquidation in 2013.Plaford pleaded guilty on June 9 to charges related to the mismarking and has agreed to cooperate with authorities. He also pleaded guilty to participating in an insider trading scheme with Valvani that prosecutors say made $25 million based on tips about U.S. Food and Drug Administration approvals of generic drug applications.Valvani had plead not guilty before his death.The case is U.S. v. Lumiere, U.S. District Court, Southern District of New York, No. 16-cr-483. (Reporting by Nate Raymond in New York; Editing by Andrew Hay)

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Wall St. pulls back from record; utilities slump

NEW YORK U.S. stocks fell on Tuesday as investors engaged in profit-taking to pull major indexes from record levels, while the trend of modest moves and low volume continued heading into the final trading day of the year.The day's losses were broad, with each of the ten primary S&P 500 sectors in negative territory. Utilities .SPLRCU - 2014's best sector performer - led the decline with a drop of 2.1 percent. Equities have enjoyed a solid rally of late, buoyed by strong economic data and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. The S&P 500 gained nearly 6 percent over the prior eight sessions and managed to score its 53rd record close of the year on Monday.The speed and scale of the rally provided incentive to take profits, and amplified volatility is possible this week with many market participants out for the holiday, which dampens volume. The stock market will be closed on Thursday for the New Year's holiday."It wasn’t going to take much to prompt the decline, it’s probably more resting than anything else. We’ve had a pretty significant move higher," said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco. "We’ve marched straight up from 1,970 or so to about 2,100 so it’s only natural that we are going to get a little bit of a pullback here."The Dow Jones industrial average .DJI fell 55.16 points, or 0.31 percent, to 17,983.07, the S&P 500 .SPX lost 10.22 points, or 0.49 percent, to 2,080.35 and the Nasdaq Composite .IXIC dropped 29.47 points, or 0.61 percent, to 4,777.44.In the latest economic data, consumer confidence rose slightly less than expected in December, while U.S. single-family home price appreciation slowed less than forecast in October. NeuroDerm Ltd (NDRM.O) soared more than 193 percent to $18.14 on heavy volume after it said data from a mid-stage study suggested that a higher dose of its Parkinson's drug could provide an alternative to treatments that require surgery. Civeo Corp (CVEO.N), which provides temporary housing for oilfield workers and miners, late Monday slashed its workforce and forecast revenue could fall by one-third as slumping crude prices force oil producers to cut costs. The stock plunged 52.6 percent to $3.92 on volume of about 56.2 million shares, the most active day in its history. Volume was light, with about 4.42 billion shares traded on U.S. exchanges, well below the 7.06 billion average so far this month, according to data from BATS Global Markets.Declining issues outnumbered advancing ones on the NYSE by 1,806 to 1,262, for a 1.43-to-1 ratio; on the Nasdaq, 1,671 issues fell and 1,031 advanced for a 1.62-to-1 ratio favoring decliners.The benchmark S&P 500 posted 25 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 107 new highs and 39 new lows. (Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

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