Genzyme boss counters Sanofi-Aventis hostile bid

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The head of US biotechnology group Genzyme on Friday tried to deflect a 18.5 billion dollar hostile takeover bid by French pharmaceutical giant Sanofi-Aventis, saying it sharply undervalued the firm.

Genzyme chief executive Henri Termeer said in an analyst conference that he estimated the company's value at 89 dollars a share, or a total of some 22.7 billion dollars.

That was 18 percent more than Sanofi's offer of 69 dollars a share, or 18.5 billion dollars.

Termeer, who based his estimate on forecasts of Genzyme's 2011 earnings, said he was "not against the sale when recognizing the value of the corporation."

"Sanofi-Aventis has stated that the 69 dollar-per-share tender offer price represents a multiple of 20 times consensus earnings estimates," he said.

"Applying this multiple to the midpoint of Genzyme's 2011 guidance would yield an offer price of 89 dollar per share."

The Sanofi offer represents about a 0.4 percent discount to Genzyme's closing share price of 71.96 dollars on Thursday. The share was up 0.85 percent, at 72.57 dollars, in afternoon trade on Friday in New York.

Sanofi-Aventis earlier this month launched the hostile bid for the US biotech firm and rare disease specialist.

Genzyme's management had spurned the bid in late August.

Industry analysts said that acquiring Genzyme would be a major step for Sanofi in a drive by big pharmaceutical groups to expand activities in biotechnology and treatments of rare diseases.

The French pharmaceutical company says the acquisition will allow Genzyme to increase investment into its products that address rare diseases, kidney disease, orthopedics, cancer, transplant and immune diseases, and diagnostic testing.

© 2010 AFP

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