In France agrees on the difficulty of Sanofi-Aventis merging due to shareholder disagreement (Total would like but L'oreal don't want, more than 25% of their actal profits) and also to the politics, whether it would create the #2 biggest pharam company (after Pfizer), the jobs cut is considered here unbereable by politicians.
[Sanofi’s accepted bid is 20% higher than the recent valuation of its original bid, and 36% higher than the original bid at the time that bid was made.]
By CBS MarketWatch Last Update: 5:26 PM ET April 25, 2004
SAN FRANCISCO (CBS. MW) - Franco-German drugmaker Aventis accepted a new takeover offer worth about $64 billion from Sanofi-Synthelabo on Sunday, according to media reports citing French authorities.
The deal, if approved would create the world's third-largest drug company [after PFE and GSK].
The decision by Aventis' (AVE) board is a blow to Switzerland's Novartis (NVS) [but probably a *good* thing for NVS’ shareholders, IMO], which had been considering making a rival offer but whose efforts were resisted by the French government.
Novartis said Sunday it would no longer pursue Aventis and accused Aventis of going back on an invitation to open negotiations made earlier this month, the Financial Times reported Sunday.
"We decided not to make a bid once the conditions we had set out were not met," Daniel Vasella, Novartis's chairman, was quoted in the Financial Times. "We were willing to challenge direct government intervention, but we were not willing to play a game of being interlopers or competitors."
The French finance ministry on Friday reiterated its belief that an Aventis-Sanofi deal was in the "national interest." Meanwhile, German Chancellor Gerhard Schroeder said governments should be "bound by neutrality" in their stance towards Aventis, AFX reported.
By promoting Sanofi, the government runs the risk of alienating foreign investors, said Steven Cohen, chief investment officer of Kellner DiLeo Cohen & Co., a New York hedge fund with around $500 million under management. The fund bought Aventis shares earlier in the year.
Sanofi's (SNY) initial hostile stock-and-cash offer, submitted in January, had been rejected by Aventis.
Sources close to Aventis told the Associated Press that Sanofi had increased its offer to close to $83 per share, from the $68.80 that its previous unsolicited bid was worth on Friday.
Company officials could not be reached Sunday for comment on the reports.
If Sanofi had failed to buy Aventis, it would potentially become vulnerable to takeover bids itself. Sanofi's offer for Aventis was widely seen as a defensive move in the face of possible interest from bigger players, such as Pfizer (PFE) or Britain's GlaxoSmithKline (GSK).
French Prime Minister Jean-Pierre Raffarin on Sunday hailed the deal, saying that it corresponds with France's "strategic interests" because it keeps jobs and decision-making of the drug companies in France.
The deal must still be approved by shareholders. <<
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