Hostile intent: sanofi-aventis’s play for Genzyme heats up

French pharma takes acquisition offer straight to shareholders; stays pat on $69-per-share price

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PARIS—Since summer, sanofi-aventis has been trying to convince the leaders of Cambridge, Mass.-based Genzyme that $69 per share—or about $18.5 billion—is a fair price for it to be acquired by the French Big Pharma company. So far, Genzyme hasn't budged on its position that the price lowballs its true value to sanofi, and so the French pharma took things hostile Oct. 7.

The offer remains the same at $69 per share, but now sanofi is taking the tender offer straight to the shareholders, and has placed a Dec. 10, 2010 deadline for Geznyme to accept or decline the offer. Continuing with the stance it has held since the whole process began in summer, Genzyme again rejected the bid as being too low.

"The offer price does not adequately compensate Genzyme's shareholders for the strategic importance and financial benefit to sanofi-aventis of a potential transaction with Genzyme," the Cambridge-based company said in a statement.

In negotiations thus far between the two parties, a price range of $69 to $80 per share has been bandied about, but sanofi has been unwilling to move from the low end of that spectrum, saying that it needs more detailed information about Genzyme to justify raising its price, particularly since there are no rival bidders with which to compete.

Some unnamed sources have told media outlets that GlaxoSmithKline, Pfizer and Johnson & Johnson have all expressed interest in acquiring the company, but at least one of those companies, GSK, seems to be out of the running—unlesss it's operating in a serious cloak-and-dagger mode. Moncef Slaoui, the British pharma's head of research and development, told French newspaper Les Echos in early September, "An offer by GlaxoSmithKline for Genzyme does not make sense. It is too expensive."

We also ruminated a little about the issue at our ddn Online blog, which you can reach by clicking here, and we welcome any comments you might want to share there on the matter. In addition, we will be covering developments more in depth in our Oct. 13 ddn Online e-newsletter.

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