June 12, 2006
Via U.S. Mail
Graeme Musker
AstraZeneca PLC
15 Stanhope Gate
London W1K 1LN
RE: Cambridge Antibody Technology Group plc
Schedule 13E-3 and Schedule TO-T filed May 23, 2006 by
AstraZeneca PLC and AstraZeneca UK Limited
Amendment No. 1 to Schedule 13E-3 and Schedule TO-T filed May
24, 2006
by AstraZeneca PLC and AstraZeneca UK Limited
Amendment No. 2 to Schedule 13E-3 and Schedule TO-T filed May
25, 2006
by AstraZeneca PLC and AstraZeneca UK Limited
Amendment No. 3 to Schedule 13E-3 and Schedule TO-T filed
June
7, 2006
by AstraZeneca PLC and AstraZeneca UK Limited
Amendment No. 4 to Schedule 13E-3 and Schedule TO-T filed
June
9, 2006
by AstraZeneca PLC and AstraZeneca UK Limited
File No. 005-46037
Dear Mr. Musker:
We have reviewed your filing and have the following
comments.
Where indicated, we think you should revise your document in
response
to these comments. If you disagree, we will consider your
explanation as to why our comment is inapplicable or a revision is
unnecessary. Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
information so we may better understand your disclosure. After
reviewing this information, we may raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or any other aspect
of
our review. Feel free to call us at the telephone numbers listed
at
the end of this letter.
Schedule 13E-3/Schedule TO-T
1. Please ensure that you have provided all of the required
information pursuant to Item 1006(c) of Regulation M-A. For
example,
address whether you have any plans to change Cambridge`s charter,
bylaws or other governing instruments, pursuant to Item
1006(c)(10)
of Regulation M-A.
Recommended Cash Offer
2. Please revise the cover page of the document that will be sent
to
security holders to include the legend required by Rule 13e-
3(e)(1)(iii).
Frequently Asked Questions, page 2
3. In an appropriate place in this discussion, please also revise
to
briefly provide the fairness determination made by you, in
addition
to that made by Cambridge.
4. "Do the CAT Directors support the Offer?" We note your
disclosure
indicating that the board of directors "consider the terms of the
Offer to be fair and reasonable." On page 10, you state that the
"CAT Board considers the Offer to be fair to the holders of CAT
Securities to whom the Offer is being made." Please revise the
fairness determinations of Cambridge to indicate that the going
private transaction or, in this case, the Offer is fair to
unaffiliated stockholders. In doing so, please ensure that
consistent changes are made throughout the document.
5. "What are the most significant conditions to the Offer?" Where
you
discuss the minimum tender condition, please quantify what amount
of
shares you will need to be tendered in order to satisfy this
condition and indicate to what extent the condition has already
been
satisfied in light of the shares you already own and the shares
the
officers and directors of Cambridge plan on tendering into the
Offer.
Letter from AstraZeneca, page 13
6. In the Introduction, you mention that in providing advice to
the
Cambridge Board, Morgan Stanley took into account the "commercial
assessments of the CAT Directors." Please revise to explain what
you
mean by this and confirm that you have provided related disclosure
pursuant to Item 1005 of Regulation M-A.
7. In Section 15 and the discussion of Taxation, we note that you
have included a disclaimer referring to IRS Circular 230. We
object
to the inclusion of this disclaimer because investors must be able
to
rely on the information contained in your offering circular. We
do
not object to a statement that each investor should consult his
tax
advisor to discuss the tax consequences of owning shares in view
of
his particular situation. Please revise to remove this disclaimer
or
tell us why you believe it is necessary. For the same reasons,
please also eliminate the statement that the discussion is
included
for general information only.
Special Factors, page 30
1. Background of the offer and Contacts with CAT, page 30
8. You mention on page 30 that on January 27, 2006, there was a
discussion about possible deal structures. There is a similar
reference to business models that were considered on March 2,
2006.
Please revise to elaborate upon the alternatives that were
considered, pursuant to Item 1013(b) of Regulation M-A. Please
also
revise to explain briefly why the "centre of excellence" approach
was
likely to be the most attractive model from a business
perspective.
9. Please revise to briefly elaborate upon the non-confidential
Investor Presentation "covering various aspects of CAT`s business"
that was presented on March 8, 2006.
10. You mention that the CAT Offer Committee of the CAT Board was
appointed to deal with "certain matters." Please revise to
elaborate
upon what matters they were appointed to deal with. If they were
formed to consider the fairness of the transaction, revise to
discuss
who the members of the committee were and how they were selected.
Please also revise your discussion that follows under "Fairness of
the Offer" to disclose what determination the Committee, in
addition
to the Board of Directors, made as to the fairness of the
transaction.
11. Revise to briefly summarize what was discussed at the meetings
on
April 7 and 11, 2006 held with Goldman Sachs and relating to an
analysis of precedent transactions and valuation arguments. Also,
any written documentation furnished along with any oral
presentation,
for example, analyses, outlines or evaluations must be filed as an
exhibit, pursuant to Item 1016 of Schedule 13E-3, considering it
would appear that these discussions constitute reports pursuant to
Item 1015 of Regulation M-A.
12. Elaborate upon the "potential terms" that were discussed at
April
9, 2006. Please revise to discuss how the parties ended up
arriving
at the offer price of 1,320 pence per share.
13. We note your indication that on May 14, 2006, both your board
and
that of Cambridge approved the terms of the Offer. Was this also
when the fairness determination was made? Please revise.
3. Fairness of the Offer, page 35
14. In an appropriate place in this discussion, please ensure that
you have discussed why each filing person decided to undertake the
transaction now as opposed to some other time in Cambridge`s
history.
Consider Instruction 1 to Item 1013 of Regulation M-A in drafting
the
response.
15. In support of your fairness determination, you mention that
the
"price of the Offer also reflects the value of several other
substantial assets beyond CAT`s current scientific capabilities"
including the royalty stream on the sales of HUMIRA, etc. Please
revise to quantify, if possible, how the value of these assets
assisted you in arriving at your fairness determination.
16. You mention that net book value was not considered to be a
material factor relevant to acquisitions of biotechnology
companies
or to the trading prices of such companies. Please revise to
briefly
explain why.
17. Please elaborate upon this discussion to disclose how you
determined the transaction to be substantively fair to the
unaffiliated shareholders. The factors listed in Instruction 2 to
Item 1014 are those generally considered relevant in addressing
the
substantive fairness of a Rule 13e-3 transaction and should be
discussed. Specifically, you have not addressed the going concern
value of the Common Stock, pursuant to Instruction 2 (iv) of Item
1014 of Regulation M-A. Also, you have not explained why a
fairness
opinion was not obtained from Goldman Sachs International in
connection with the Offer. To the extent that any such factors
were
not considered or deemed relevant in the context of this
particular
transaction, that fact may be important for shareholders in
assessing
the transaction and the company`s fairness determination. See
Exchange Act Release 17719 (April 13, 1981).
18. In your discussion of Cambridge`s determination of fairness,
please revise this discussion to state, if true, that Cambridge
determined that the Offer is substantively and procedurally fair
to
the unaffiliated shareholders, as you have with respect to
AstraZeneca`s determination of fairness. Also, in doing so,
please
revise your discussion of fairness to address how Cambridge
determined the offer to be procedurally fair and what factors set
forth below support this determination.
19. Please revise this discussion to ensure that you have provided
a
reasonably detailed discussion of each material factor forming the
basis for Cambridge`s fairness determination in accordance with
Item
1014(b) of Regulation M-A. A listing of the factors considered,
without a discussion of how that factor relates to the
determination
that the transaction is fair to the unaffiliated stockholders is
inadequate. See In the Matter of Meyers Parking Systems Inc.,
Securities Exchange Act Rel. No. 26069 (September 12, 1988). For
example, you mention that "AstraZeneca would be able to ascribe
more
value to CAT`s core technologies than other potential purchasers
of
CAT," however, you do not explain why or how that factor relates
to
your fairness determination. Similarly, how did the fact that CAT
gave certain exclusivity commitments to AstraZeneca impact the
determination of the fairness of the transaction? Also, how did
the
fact that Morgan Stanley will receive two payments impact the
determination of fairness of the transaction?
20. We also note that the CAT Board considered analyst projections
of
the trading range for CAT shares. Revise to quantify the range of
those projections.
21. Please elaborate upon this discussion to disclose how
Cambridge
determined the transaction to be substantively fair to the
unaffiliated shareholders. Again, the factors listed in
Instruction
2 to Item 1014 are those generally considered relevant in
addressing
the substantive fairness of a Rule 13e-3 transaction and should be
discussed. Specifically, you have not addressed the going concern
value of the Common Stock, pursuant to Instruction 2 (iv) of Item
1014 of Regulation M-A. To the extent that any such factors were
not
considered or deemed relevant in the context of this particular
transaction, that fact may be important for shareholders in
assessing
the transaction and the company`s fairness determination. To the
extent Cambridge intends to rely upon the analysis of Morgan
Stanley
as it relates to the going concern value of Cambridge, the board
must
specifically disclose that it has adopted the analysis of Morgan
Stanley. See Exchange Act Release 17719 (April 13, 1981).
22. Further, in arriving at Cambridge`s fairness determination,
what
consideration was given to the fact that, in at least one
instance,
the results of Morgan Stanley`s analyses yielded a range that was
in
excess of the purchase price?
23. You mention that the Cambridge Board did not consider the net
book value or the liquidation value because those methodologies
"would result in lower valuations than those which the CAT Board
was
already considering." Please revise to elaborate upon the basis
for
this determination and provide quantified information, if
possible,
to support it.
24. In the last paragraph of the discussion of Cambridge`s
fairness
determination, it states that the description of factors set out
above "summarizes the primary factors...considered by the CAT
Board."
Please revise to state that the description of factors sets forth
the
material factors, consistent with Item 1014(b) of Regulation M-A,
considered by the Board.
25. Disclose why the Morgan Stanley & Co. Limited fairness opinion
does not address the fairness of the consideration solely to the
unaffiliated stockholders.
26. We note the indication in your disclosure that the opinion has
been addressed to the Cambridge Board "only." We note this
limitation on reliance by shareholders. Because it is
inconsistent
with the disclosure relating to the opinion, the limitation should
be
deleted or corrected. Alternatively, disclose the basis for the
belief that shareholders cannot rely on the opinion. Describe any
applicable legal authority addressing the availability of such a
potential defense. In the absence of any applicable legal
authority,
disclose that a court will resolve the availability of such a
defense. Also disclose that resolution of this issue will have no
effect on the rights and responsibilities of the board of
directors
of Cambridge under applicable laws. Further, disclose that the
availability of such a legal defense to either financial advisor
would have no effect on the rights and responsibilities of the of
the
company`s board of directors under the federal securities laws.
27. We note your indication that Morgan Stanley reviewed and
considered certain internal financial statements and financial
projections furnished by Cambridge. Any non-public information
used
by Morgan Stanley in formulating its fairness opinion should be
summarized in the filing. Also, in an appropriate place in this
disclosure, please indicate whether the board reviewed, for
accuracy
and completeness, this financial information and whether the board
found Morgan Stanley`s reliance upon those materials to be
reasonable.
28. We note your indication on page 47 that the "non-executive
directors of CAT did not retain any separate unaffiliated
representative to act solely on behalf of the Public
Shareholders..."
Please revise to explain why not.
4. Effects of the Offer on Holders of CAT Securities, page 45
29. Please revise this discussion to reflect the effect of the
transaction in terms of dollar amounts, in addition to
percentages,
as it relates to net earnings, pursuant to Instruction 3 of Item
1013
of Regulation M-A.
Part B - Further Terms of the Offer, page 56
30. We note your indication in section 1.7 that you will advise
shareholders of your intent to reduce the percentage through a
"press
release designed to inform holders of CAT Securities..." Please
tell
us exactly how you intend to advise U.S. security holders. Note
that
the Cross-Border Tender and Exchange Offer Release No. 33-7759
would
require you to disseminate this through a press release and other
methods reasonably designed to inform U.S. security holders, which
could include placing an advertisement in a newspaper of national
circulation in the United States.
Exhibit 99.(a)(2) - Letter of Transmittal
31. We note your request that the security holder acknowledge that
they have "received and reviewed" the Offer Document. It is not
appropriate to require security holders to attest to the fact that
they have "reviewed" the terms of the offer as such language
effectively operates as a waiver of liability. Please delete this
language throughout these materials.
Closing Comments
As appropriate, please amend your filing and respond to these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested supplemental information. Detailed cover
letters greatly facilitate our review. Please understand that we
may
have additional comments after reviewing your amendment and
responses
to our comments.
Please also advise us as to your intentions with respect to
re-
dissemination of the materials you revise in response to our
comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the filing persons are in possession
of
all facts relating to their disclosure, they are responsible for
the
accuracy and adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement acknowledging that:
* the filing person is responsible for the adequacy and accuracy
of
the disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the filing person may not assert staff comments as a defense in
any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filing or in
response to our comments on your filing.
If you have any questions regarding our comments, please do not
hesitate to contact me at (202) 551-3264. You may also reach me
by
facsimile at (202) 772-9203.
Sincerely,
Mara L. Ransom
Special Counsel
Office of Mergers and Acquisitions
cc via facsimile at (011 44 20) 7456-2222:
Thomas B. Shropshire, Esq.
Linklaters
AstraZeneca PLC
June 12, 2006
Page 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-3628
DIVISION OF
CORPORATION FINANCE