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White-shoe lawyers in the middle of the year’s testiest M&A fight are denying they insulted the Delaware judge overseeing their case on a hot mic.
The judge on Wednesday denied Pfizer’s efforts to stop obesity drugmaker Metsera from selling itself to Novo Nordisk. She ruled that Metsera’s board was within its rights to find Novo Nordisk’s higher, but complicated and regulatorily dicey, offer superior to Pfizer’s $7.3 billion bid.
Pfizer intends to make a fresh bid for Metsera, according to a person familiar with the matter, confirming an earlier report in The Wall Street Journal.
Left unmentioned by the judge, Vice Chancellor Morgan Zurn: comments at the end of a telephone hearing Tuesday on the matter, in which a participant can be heard insulting Zurn’s grasp of the law and criticizing her handling of the case, according to people who heard the exchange. Zurn had sounded skeptical of Pfizer’s need for urgency, saying that she was reluctant to step into the middle of a live bidding war. One participant — unaware they were broadcasting to anyone still on the line, which was open to muted investors, analysts, and reporters — said Zurn was “misunderstanding” the nature of M&A bidding contests.
A spokesman for Pfizer said the voice on the call wasn’t one of the company’s lawyers at Wachtell Lipton, the elite New York law firm on a red-hot M&A run right now. Novo Nordisk’s and Metsera’s lawyers in New York and Delaware had dropped off the call, too, and were in fact debriefing with each other when a court official sent participants an email a few minutes after the teleconference ended, notifying them that someone’s line was still open.
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Pfizer agreed to buy Metsera earlier this year after shutting down its own efforts to develop a drug to compete with Novo Nordisk’s Ozempic and Eli Lilly’s Mounjaro. Novo pressed a $9 billion topping bid, which Metsera accepted last week. Pfizer quickly sued, asking a Delaware judge for a restraining order barring Metsera and Novo Nordisk from consummating their deal while a trial is scheduled to decide the legal issues, which center on antitrust concerns.
Novo Nordisk is the leading obesity drugmaker and would be acquiring a startup that would put Pfizer in competition. In fact, the Federal Trade Commission last week gave a quick blessing to Pfizer’s proposed acquisition of Metsera, and on Wednesday warned that Novo Nordisk’s deal appeared to be structured to skirt antitrust laws and risks being unwound later by the agency.
The Delaware decision “does not address the merits of the underlying legal issues raised, and Pfizer intends to continue to pursue its claims vigorously,” the company said. “We are confident that Novo Nordisk’s unprecedented and illegal scheme to circumvent antitrust scrutiny will not stand.”
“The deal structure is consistent with antitrust laws,” a Novo spokesperson said. “We are in a constructive dialogue with the FTC addressing the potential issues identified in their letter, and we remain confident that our agreement with Metsera is consistent with the HSR Act and antitrust laws.”