Sanofi-Aventis launches hostile bid for Genzyme
French pharmaceutical giant Sanofi-Aventis on Monday said it had launched a 18.5-billion-dollar hostile bid for US biotechnology group and rare disease specialist Genzyme, which urged shareholders to refrain from action.
"Genzyme's refusal to take part in constructive discussions has led Sanofi-Aventis to put forward its offer directly to shareholders," Sanofi said in a statement.
The company said its bid, at 69 dollars per share, would remain open until December 10.
"It's a substantial price that well reflects the value of the company," Sanofi chief executive Christopher Viehbacher said during a telephone press briefing.
He said Genzyme shareholders representing 50 percent of the capital wanted to sell their shares.
"They want to sell and do not understand the attitude of management and the board of directors who do not want to sit at the table and negotiate with us."
Genzyme's management, which had spurned the bid in late August, called on its shareholders to take no action on the unsolicited offer before its board reviews the offer and hands "its formal position within ten business days."
Industry analysts said that acquiring Genzyme would be a major step for Sanofi in a drive by big pharmaceutical groups to become active in biotechnology and treatments for rare diseases.
Such treatments require specific knowledge to develop but can be marketed at high prices and are difficult to copy.
At 69 dollars, the offer amounts to a 38 percent premium on Genzyme's closing share price, 49.86 dollars, on the New York Stock Exchange on July 1, the date on which reports of Sanofi's intentions first surfaced.
Genzyme shares traded 0.50 percent higher on Wall Street on Monday at 71.24 dollars. Sanofi-Aventis shares Monday fell 1.03 percent in New York.
Genzyme management has until now insisted that Sanofi's proposal greatly undervalues the US group.
Genzyme chief executive Henri Termeer has said an offer pitched at 80 dollars a share would more accurately reflect the value of the company.
A Paris-based analyst, who asked not to be named, said early Monday that "the market had been betting on a negotiated solution between the parties that would have enabled access to (Genzyme's) scientific and accounting data."
He said Sanofi had tried unsuccessfully to secure such access, which could have provided assurances on Genzyme's growth prospects, particularly regarding new products.
He added that the uncertainty surrounding the bid in the absence of the data was weighing on Sanofi's share price.
© 2010 AFP