Sanofi extends Genzyme offer again

24th January 2011, Comments 0 comments

French pharmaceutical giant Sanofi-Aventis said Monday it had extended a second time its bid for US biotechnology group Genzyme without improving its offer as the two sides continue negotiations.

Sanofi launched its offer of 69 dollars per share that values the company at 18.5 billion dollars (13.6 billion euros) on October 4, after months of fruitless talks with Genzyme, and extended it again in December.

Genzyme's management rejected the bid on grounds that it undervalued the group, but the two sides eventually began serious talks that have focused on putting a price to some of its potential medications under development.

"As previously announced, Sanofi-Aventis and Genzyme are engaged in discussions regarding the structure of a contingent value right (CVR) involving Lemtrada (alemtuzumab MS) as an element of any potential transaction," Sanofi said in statement.

"Although those discussions have continued and have included commercial teams and executives of both Sanofi-Aventis and Genzyme, there remain significant differences on the potential CVR and the value of Sanofi-Aventis' offer, and there is no guarantee that the parties will come to an agreement," it added.

Lemtrada is an experimental treatment under development by Genzyme.

A CVR is an instrument that gives shareholders of a company being taken over additional benefits if certain events occur within a certain deadline. They are particularly useful in mergers and acquisitions when the eventual value of products under research and development cannot be determined.

Sanofi set a new deadline of February 15 for its offer. It said it had acquired only 0.4 percent of Genzyme's shares by the previous deadline of January 21.

A number of analysts had expected Sanofi to raise its offer slightly as well as a possible announcement of an agreement of a CVR.

© 2011 AFP

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