Vince Cable rules out action on foreign bids six weeks after Pfizer battle

 

associate business editor

The Business Secretary Vince Cable has all but ruled out a further “public interest” test on controversial mergers.

On the day US pharmaceuticals group AbbVie hiked its takeover proposal to Shire Pharmaceuticals to £30bn, the Business Secretary told peers on the House of Lords Economic Affairs Committee that a “crude test of nationality” has “no merit”.

And he said that any Government would have to work within the framework of European law, arguing that the 1975 Industry Act, which in theory gives him wide power to intervene, would in effect be illegal.

He also suggested that recent powers adopted by the French Prime Minister Manuel Valls allowing him to block foreign bids for French companies deemed “strategic”  would ultimately prove unworkable.

“We couldn’t use the 1975 Act and we are sceptical the French Government could use the powers it has given itself.”

Mr Cable insisted there was still action the British Government could take, and argued Pfizer’s hugely controversial failed takeover approach for AstraZeneca was an example of where this had occurred.

“We didn’t just sit back and watch things happen. We did engage. We tried to be clear what the public interest was, and we wanted to see meaningful and binding obligations. In the event they [Pfizer] walked away and it never happened. It wasn’t just a case of us sitting back and ignoring it.”

Critics have argued the obligations weren’t what they appeared, with some, such as keeping Astra’s Cambridge base, already part of Pfizer’s plans and others subject to caveats rendering them all but worthless.

But Mr Cable told peers: “Pfizer were very conscious of their own reputation, which was subject to sharp scrutiny. The key phrase which I kept repeating was that any undertaking would have to be binding.”

He declined to say what the UK Government would do in the event of a repeat. “I’d rather not divulge too much about how we are doing our scenario planning,” he said.

But on the controversial issue of “inversion” which has seen companies such as Pfizer and AbbView seeking UK targets to take advantage of this country’s favourable tax regime, he said: “If Britain advertises itself as a tax friendly country it would be a strange position to adopt by saying to foreign firms you shouldn’t come here.”

He described US companies holding money offshore and using it to buy other companies rather than sending it back to their shareholders back home as “an issue for US tax policy”.

Earlier, Sir John Kay, who conducted a review into Britain’s equity markets and long-term decision making for the Government, likened the UK to “the favourite hunting ground of investment bankers seeking prey”.

He said the location of a corporate HQ was important, and that there were “a lot of things” that the Government could do to frustrate disadvantageous takeovers “without necessarily needing new rules”.

The US firm AbbVie, which would take over Shire and move its base from low-tax Ireland to the UK, made its fourth takeover attempt by upping its approach by 11 per cent to £30.1bn.

The latest £51.15 a share cash-and-shares offer compared to AbbVie’s previous tilt at £46.26, which the London-listed hyperactivity and rare diseases specialist said fundamentally undervalued the company.

Shire responded that it would hold a board meeting to discuss the offer, and said AbbVie did not inform it of the new offer before announcing it to the stock market.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy