Former Pfizer CEO Ian Read and ex-CFO Frank D’Amelio recently announced that they would be distancing themselves from Starboard Value’s activist campaign at the pharmaceutical company. This decision comes shortly after news of the activist fund’s stake in Pfizer broke.
In a joint statement released through an investment bank, Read and D’Amelio expressed their full support for Pfizer’s current CEO Albert Bourla. They mentioned that they have confidence in the current board and management team to deliver shareholder value over time. This move is quite significant, especially considering that the company’s shares have remained relatively flat for the year and have dropped by around 50% from their 2021 highs.
The statement was issued through Guggenheim Securities, a bank that has been involved in Pfizer’s dealmaking activities for some time. However, the bank declined to provide further comments beyond the official release. The decision by the former executives to step away from the activist campaign has raised questions about the future direction of Starboard’s efforts at Pfizer.
Starboard, known for its aggressive activism, has accumulated a significant stake of approximately $1 billion in Pfizer. The fund is led by Jeff Smith, who has previously initiated campaigns at companies like Autodesk and Salesforce. While Starboard typically focuses on the technology sector, it has also made investments in companies such as Starbucks and News Corp this year.
The timing of Read and D’Amelio’s withdrawal from the campaign, just before a scheduled meeting between CEO Bourla and Jeff Smith, has added an element of intrigue to the situation. It remains to be seen how this development will impact Starboard’s overall strategy at Pfizer. The fund has not yet provided any official comments on the matter.
As the board of Pfizer navigates through the challenges posed by the activist investor, it will be interesting to see how the company’s leadership responds to the shifting dynamics. With the pharmaceutical industry facing numerous pressures and uncertainties, maintaining a clear strategic direction will be crucial for Pfizer’s future success. While the details of the situation continue to unfold, stakeholders will be closely monitoring any further developments in this evolving story.
