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Aventis sees ‘long battle’ with Sanofi

PARIS, Jan 29 (AFP) – The head of Franco-German pharmaceuticals group Aventis acknowledged Thursday his company faced a long, hard struggle in its determination to thwart a takeover from smaller French rival Sanofi-Synethelabo.

Aventis chairman Igor Landau told French radio station Europe 1 that Sanofi would have to raise its EUR 48 billion (USD 60 billion) bid by 40 to 50 percent to attract sufficient interest.

It would be “ridiculous,” he said, for Sanofi to sweeten the deal by only 12-15 percent, adding: “Anything that is not 40 or 50 percent higher is not very interesting.”

But a source close to Aventis stressed that “the 40-50 percent figure should not be taken literally.”

“It’s rather a way of pointing out the weakness of the Sanofi offer.”

The Aventis supervisory board late Wednesday rejected the bid, following an earlier recommendation from Landau.

The board likewise urged Aventis shareholders to spurn the offer.

“We’re only at the start of long obstacle course,” Landau told the radio.

“We think we have the means to squelch it,” adding that the group was studying “all possible scenarios and had excluded none of them.”

Speculation has been rife that a third company might be found to step into the fray to wrest Aventis from Sanofi’s clutches.

But Landau said a counter-offer was not the group’s “favored scenario.”

For the moment the critical question is whether the Kuwait Petroleum Corporation (KPC), Aventis’s principal shareholder, will continue to hold firm in its rejection if Sanofi improves its offer.

Sanofi hopes to complete the acquistion by the end of June, which most analysts see as being far too ambitious.

They also predict the group will have to raise the value of its bid.

Kuwait Petroleum, headed by Kuwaiti Energy Minister Sheikh Ahmed Fahad al-Sabah, holds a 13.5 percent stake in Aventis and 13.6 percent of the voting rights. Its representative on the supervisory board voted against the merger on Wednesday.

When KPC acquired its shares in Aventis in 1999 they were valued at EUR 61.95 a piece, well above the EUR 60.43 proposed by Sanofi.

Seham Razzouqi, KPC’s representative on the supervisory board, last September described the company’s holding in Aventis as “one of its most successful investments.”

She said the difference between KPC’s investment in the early 1980s in the German drug company Hoescht, which merged with Rhone-Poulenc to form Aventis, and the value of the latter’s shares on March 31 represented a capital gain of EUR 2.519 billion.

Aventis shares in mid-day trading here were up 0.66 percent to EUR 60.90 while those of Sanofi were unchanged at EUR 53.20.


                                Subject: France news