Sanofi makes hostile offer for Genzyme
pharmafile | October 4, 2010 | News story | Manufacturing and Production, Research and Development, Sales and Marketing | Genzyme, Sanofi-Aventis
Sanofi-Aventis’ courtship dance around Genzyme has turned more aggressive with an offer – made over the heads of Genzyme’s board – to shareholders.
The French pharma company proposes to acquire all outstanding shares in Genzyme for $69 each – the same price the company offered the board in July, valuing the US biotech at around $18.5 billion.
In a letter to Genzyme chairman Henri Termeer, Sanofi chief executive Christopher Viehbacher wrote: “We are disappointed that you remain unwilling to have constructive discussions with us regarding our offer.
“This has left us with no choice but to present the offer directly to Genzyme’s shareholders.”
The formal tender, which expires on 10 December, comes as no surprise and analysts see this direct appeal to shareholders as the endgame in Sanofi’s attempts to acquire Genzyme.
Despite already rejecting Sanofi twice, Termeer has said his company could be for sale to Sanofi if it offers a “fair price”.
But he has previously called the offer of $69 a share “opportunistic”, saying it “undervalued” the company – however, he has also indicated he will retire next year, a move which could help smooth the path for a deal.
Analyst Jefferies International sees the unaltered $69 offer as a “sighting shot” but expect a transaction to be concluded “somewhere below the $75 per share level”.
Sanofi insists it wants to engage with Genzyme’s board but said a meeting between the two companies’ bosses on 20 September “proved unproductive”.
It also says its executives have held talks with parties who collectively own more than 50% of Genzyme’s outstanding shares.
“The conversations revealed that those shareholders were frustrated with Genzyme’s persistent refusal to have meaningful discussions,” Sanofi said.
The tender offer represents a premium of 38% over Genzyme’s share price of $49.86 on 1 July, the company added.
Genzyme has been beset with manufacturing problems this year that have interrupted supply of some of its biggest brands, driving it into a second-quarter loss and forcing it to cut 2010 revenue forecasts.
The company also plans to cut jobs, announcing last month it would reduce its workforce by around 1,000 over the next 15 months.
Adam Hill
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