Sanofi’s $18.5bn bid for Genzyme rejected
pharmafile | August 31, 2010 | News story | Manufacturing and Production, Research and Development, Sales and Marketing | Genzyme, Sanofi-Aventis
Sanofi-Aventis has gone public with its $18.5 billion offer for Genzyme after the US biotech’s board unanimously rejected the bid earlier this month.
The French pharma firm is now placing its hopes in a direct appeal to Genzyme’s shareholders, looking to sway them with a deal that offers a 38% premium on the biotech’s 1 July share price.
Sanofi originally made an unsolicited all-cash offer for Genzyme on 29 July and then repeated this offer in a public letter over the weekend.
The biotech’s management were quick to dismiss the offer a second time, describing it yesterday as an “opportunistic proposal with an unrealistic starting price that dramatically undervalues our company”.
In a letter to Sanofi chief executive Chris Viehbacher on 11 August the Genzyme board had already said: “Without exception, each member of the Genzyme board believes this is not the right time to sell the company, because your opportunistic takeover proposal does not begin to recognise the significant progress underway to rectify our manufacturing challenges or the potential for our new-product pipeline.”
Sanofi said it went public with its offer “in order to inform Genzyme’s shareholders of the significant shareholder value and compelling strategic fit inherent in a combination of the two companies”.
Sanofi’s Viehbacher said: “A combination with Genzyme represents a compelling opportunity for both companies and our respective shareholders and is consistent with our sustainable growth strategy.
“The all-cash offer provides immediate and certain value for Genzyme shareholders at a substantial premium that recognises the company’s upside potential, while Sanofi-Aventis shareholders would benefit from the accretion and the attractive growth prospects of this combination.”
Although keen to enter “constructive discussions” with Genzyme, Sanofi has not ruled out making a hostile bid for the company, saying it is prepared to consider all alternatives in order to successfully acquire it.
If it can pull off a deal Sanofi wants to make Genzyme its global center for excellence in rare diseases, at the same time further increasing its own presence in the greater Boston area.
Genzyme has been beset by myriad manufacturing woes over its best selling treatments Fabrazyme for Fabry disease and Cerezyme for Gaucher’s disease that most recently resulted in it posting a second quarter loss.
In relation to its recent problems, Termeer said that his bankers met with Sanofi’s financial advisors on 24 August where they provided non-public information on the company’s progress to “meaningfully improve its manufacturing capacity”.
Meanwhile, supplies of Cerezyme and Fabrazyme were set to return to near-normal levels during the fourth quarter, “further illustrating the progress we are making as well as the opportunistic nature of your proposal” Termeer said.
Ben Adams
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