Sanofi-Aventis hostile takeover rumours

PARIS, Jan 23 (AFP) – Speculation that French pharmaceutical group Sanofi-Synthelabo is preparing a hostile bid for Aventis intensified Friday with a report that key Sanofi shareholder L’Oreal would hold a board meeting to consider an offer.

A merger or takeover involving Sanofi-Synthelabo and Aventis would create one of the biggest pharmaceutical groups in the world.

Sanofi, responding on Thursday to a German newspaper report that a merger between the two pharmaceutical groups was close to being concluded, insisted it was not negotiating with Aventis. But it also said it continued to consider any deal that could strengthen its business.

The French newspaper Le Figaro reported that the board of cosmetics group L’Oreal, which owns 19.5 percent of Sanofi, would meet Saturday to study a possible bid by Sanofi for Aventis, a French-German company.

Le Figaro, which did not provide sources for its report, affirmed that a big transaction between Sanofi and Aventis was in the wind.

While analysts and investors had taken the view that Sanofi and Aventis might agree to a friendly merger, the newspaper said an unwelcome bid by Sanofi now seemed more likely.

The New York times, according to a note from brokers Raymond James, said Sanofi could launch a hostile bid for Aventis worth USD 60 billion (EUR 47.24 billion).

Another broker observed that such an offer would represent a premium of only five or six percent over Aventis’s current stock price, given the weakness of the dollar.

In Frankfurt, the Frankfurter Allgemeine Zeitung quoted Aventis chairman Igor Landau as saying his company was not in merger talks with Sanofi, and in Paris he was quoted by the newspaper Le Monde as saying he did not believe that Sanofi would make a takeover bid.

“There’s not the slightest contact between us,” he told Le Monde in editions to appear Saturday. “There have never been serious discussions on this matter.”

He also dismissed the likelihood that a hostile bid was being considered.

“Unsollicited mergers are rare in pharmaceuticals,” he said.

A shareholder agreement linking L’Oreal and French oil group Total in Sanofi expires on December 2, 2004. Total owns 24.4 percent of Sanofi but has indicated it would like to sell the holding because pharmaceuticals are not central to its business.

L’Oreal declined to comment on the report that its board would meet, and so did the Swiss group Nestle, which holds three of 14 seats on the board of L’Oreal. Nestle controls 26.3 percent of L’Oreal.

Sanofi shares were down 5.24 percent at EUR 58.80 while those of Aventis had gained 1.15 percent to EUR 57.25 in mid-day trade on a generally stronger Paris market.

“It’s always the predator who falls and the target who rises,” noted one Paris trader.

Another broker commented: “Some people think that this is a good time for Sanofi to acquire Aventis by paying in shares since the capitalization of both groups is roughly at the same level.

“As no one is denying a scenario in which an offer would be made, while insisting that no negotiations are under way, investors are betting on a hostile bid.”

Subject: France news