Sanofi in hostile $18.5 billion Genzyme bid
Sanofi’s $69-a-share tender offer expires Dec. 10
By Aude Lagorce, MarketWatch
LONDON (MarketWatch) — Sanofi-Aventis SA on Monday launched a hostile $18.5 billion bid for Genzyme Corp. after the U.S. biotech company spurned its earlier friendly approaches.
Sanofi-Aventis /quotes/comstock/13*!sny/quotes/nls/sny (SNY 33.12, -0.13, -0.39%) /quotes/comstock/24s!e:san (FR:SAN 48.08, -0.20, -0.41%) , France’s largest drug maker, started a tender offer to acquire all outstanding shares of Genzyme /quotes/comstock/15*!genz/quotes/nls/genz (GENZ 70.88, +0.09, +0.13%) for $69 each in cash, citing Genzyme’s “unwillingness to engage in constructive discussions.”
The offer expires on Dec. 10.
Earlier this summer, Sanofi approached Genzyme with an offer at the same level and tried to initiate talks. At the end of August, Genzyme rejected the offer, saying it substantially undervalued its prospects, and accused Sanofi of being “opportunistic.”
In a statement Monday, Sanofi said that a meeting between the firms’ chief executive officers on Sept. 20 proved “unproductive.”
It added that recent conversations with shareholders have revealed that they were growing “frustrated" with Genzyme’s “persistent refusal” to have “meaningful discussions” regarding Sanofi’s approach.
“Sanofi is committed to a transaction with Genzyme, and we believe that our offer reflects both Genzyme’s upside potential and its current operational challenges,” Sanofi CEO Christopher Viehbacher said in a statement.
Genzyme was once regarded as a blue chip among the biotech sector, but its shares took a plunge last year after manufacturing issues at one of its key plants led to worldwide shortages of two of its best-selling products.
At least one major Genzyme shareholder, Carl Icahn, has publicly hinted he would be interested in selling his stake if the price was right.
Icahn started building his position last year when Genzyme’s production problems made headlines. Icahn’s representatives currently hold two seats on the company’s 13-member board.
Sanofi is keen to do a deal to support revenue growth as some of its biggest-selling products, such as the blood thinner Plavix and the cancer drug Taxotere, face competition from generic medicines.
But it has vowed to be “disciplined” in its pursuit of Genzyme, and stressed it is not prepared to go to any length to acquire the company.
Sanofi shares fell 1.3% in morning trading in Paris.
Genzyme shares closed at $70.88 on Friday.
