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* CEO says just "interested observer" in takeover battle
* Witty views broad-based M&A deals as distracting
* Sees "rational" case for investing in UK science
By Ben Hirschler
LONDON, April 30 (Reuters) - GlaxoSmithKline is justan "interested observer" as U.S. drugmaker Pfizer battles to win British rival AstraZeneca in a potential$100 billion deal, GSK's chief executive said on Wednesday.
Andrew Witty said he hoped Pfizer would take a "rational"decision to keep drug research in Britain if the deal wentthrough, but he played down the idea that GSK might intervene asa "white knight" counterbidder.
"It's not appropriate for me to get into commentary on thisparticular transaction that is potentially going on around us,but obviously if there was anything specific that we werethinking of I would absolutely be obliged to tell you about it,"he told reporters on a conference call for first-quarter resultson Wednesday.
Witty has insisted for several years that he has no desireto engage in mega-mergers, which he sees as disruptive, and hereiterated that he much preferred targeted transactions, such aslast week's asset swap with Novartis.
"What we're focused on is ensuring that our organisation isnot distracted in the core R&D business," he said.
AstraZeneca, Britain's second-biggest drugmaker behind GSK,is an important part of Britain's life sciences sector,employing nearly 7,000 staff in the country, and the prospect ofit being acquired by Pfizer has sparked political concerns aboutbig job cuts.
Pfizer has made two approaches to AstraZeneca, both of whichhave been rebuffed. The company is widely expected to come backwith a revised offer before a May 26 deadline for it to "put upor shut up" under UK takeover rules.
The U.S. firm says it views Britain as an attractivelocation for both pharmaceutical research and manufacturing -helped by recent government tax incentives - but cannot make anyfirm commitments on future investment or jobs.
Witty, a long-time cheerleader for British science, who hasalso advised Prime Minister David Cameron on the country'suniversity system, said Britain had established a particularlyattractive environment for life sciences companies.
Part of that reflects efforts to reduce overall corporationtax rates, but the pharmaceuticals sector also enjoys a furtherboost thanks to the so-called "patent box" system, which cameinto effect last year and offers a special 10 percent tax rateon profits earned from patents.
"I would really hope that rational people under anycircumstance would choose to invest or continue to invest wherethere is great talent and there is a great environment for thatinvestment," Witty said.
"That's why we invest in Britain. We don't just investbecause Andrew Witty has a British passport." (Editing by Erica Billingham)
