Aventis plans next move against Sanofi

28th January 2004, Comments 0 comments

PARIS, Jan 28 (AFP) - The war of nerves in the acrimonious takeover battle sparked by Sanofi-Synthelabo's hostile bid for rival pharmaceutical group Aventis intensified Wednesday, with the Aventis supervisory board meeting to draft blocking tactics.

PARIS, Jan 28 (AFP) - The war of nerves in the acrimonious takeover battle sparked by Sanofi-Synthelabo's hostile bid for rival pharmaceutical group Aventis intensified Wednesday, with the Aventis supervisory board meeting to draft blocking tactics.

Meanwhile German Chancellor Gerhard Schroeder was considering raising the bid with French President Jacques Chirac when they meet informally in Germany on Feruary 9, the chancellor's spokesman said.

The German government repeated on Wednesday its concern that Aventis jobs in Germany should be retained. Aventis has suggested that 10,000-12,000 jobs could be cut if the takeover is successful.

Igor Landau, chairman of Aventis, a French-German entity, has dismissed Sanofi's EUR 48 billion (USD 60.5 billion) bid as a dangerous risk for shareholders and has urged his supervisory board to reject it.

Stock market rumors continued to swirl Wednesday to the effect that a third company might be prepared to unveil a rival - and more attractive - offer for Aventis that would save the group from the clutches of its smaller French rival.

In any case the bid has focused interest on the the strategies of other pharmaceutical groups and on the possibility it might spark broader consolidation in the European industry.

One perceived candidate to mount a rival bid is Schering of Germany, which has refused to comment. Other possibilities are Novartis of Switzerland and GlaxoSmithKline of Britain.

Analysts said Aventis above all needs to convince its principal shareholder, Kuwait Petroleum, with 13.5 percent of the capital, to hold on to its shares.

But they added that convincing Kuwait Petroleum to hold firm should not be a problem as long as Sanofi does not sweeten its offer. Kuwait Petroleum acquired its shares in 1999 at EUR 61.95 a piece. Sanofi today is proposing EUR 60.43.

With Kuwait Petroleum on board, a third company would have only to acquire a share of less than 37 percent, which would currently be worth EUR 17.4 billion, to derail the Sanofi overture, according to an analyst with the Dutch bank ABN Amro.

"It is difficult to envisage other defense mechanisms for Aventis, even if management seems to be examining other options," he said.The Sanofi move has the blessing of the French government, which sees the creation of a French-based pharmaceutical research superpower as a formidable challenge to US and Asian giants.

But in light of official expressions of concern in Germany about potential job losses, French government spokesman Jean-Francois Cope said Wednesday that Paris would be "attentive to the need for the operation to take account of job preservation."

A spokesman for the German economy ministry has said contacts are under way between the German government and certain unspecified companies, stressing that Berlin was keen to preserve Aventis sites in Germany.

German Economy and Employment Minister Wolfgang Clement said that Aventis was an example of French-German industrial co-operation and was "a very important" company to the German pharmaceutical sector.

"This is why it is very important that all of the parties concerned, insofar as they can bring any influence to bear, should watch over this example as the apple of their eyes," he told a press conference.

Sanofi-Synthelabo chairman Jean-Francois Dehecq meanwhile denied projections from Aventis that the takeover could lead to the loss of 10,000 to 12,000 jobs worldwide.

"I have never drafted a job cut plan and I am not ready to do so today," he insisted at a news conference in Frankfurt late Tuesday.

© AFP

                                Subject: France news

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