Sanofi-Aventis goes hostile in battle for Genzyme
• French pharmaceutical group launches £11.7bn bid
• US biotech has already turned down an approach
The prolonged battle for control of Genzyme, the US biotech firm, went hostile this morning after French pharmaceutical group Sanofi-Aventis launched an unsolicited $ 18.5bn (£11.7bn) bid.
Sanofi-Aventis announced the $ 69-a-share bid one month after Genzyme turned down an approach at the same price. The French company said it had been left with no choice by Genzyme’s board and directors, who believe that Sanofi’s bid significantly undervalues the firm and described the initial approach as “opportunistic”.
“While Sanofi-Aventis’ strong preference is to engage in constructive discussions with Genzyme, Genzyme’s board and management team’s continued refusal to do so has led Sanofi-Aventis to commence the tender offer,” said Sanofi. The company added that it had met Genzyme shareholders who owned more than 50% of the business and alleged that they had expressed frustration at Genzyme’s reluctance to pursue serious discussions about a transaction.
Sanofi’s chief executive, Chris Viehbacher, criticised the reticence of his Genzyme counterpart, Henri Termeer, to answer questions about the business that would have helped Sanofi put together an acceptable bid. Sanofi said the two executives had an “unproductive” meeting on 20 September.
“Our recent meetings with Genzyme shareholders demonstrate that they support a transaction and are frustrated by Genzyme’s unwillingness to engage in constructive discussions with us,” said Viehbacher. “This has left us with no choice but to present the offer directly to Genzyme’s shareholders.”
The Sanofi bid expires on 10 December and represents a premium of nearly 40% over Genzyme’s share price of $ 49.86 on 1 July. Genzyme argues that its share price does not reflect strong financial prospects from divestments and new drugs in development, while some analysts have warned that Sanofi must deal with the looming expiration of patents and the need to develop replacements. Sanofi went to court recently to try to extend the patent for Lovenox, a blood thinner that accounts for 10% of its global revenue.
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