According to people familiar with the situation, sanofi-aventis is considering whether to make an improved offer to buy Genzyme, after the biotechnology company rejected an $18.5 billion bid in August, Bloomberg reported Wednesday. The offer could be made as soon as next week, the sources noted, adding that the current $69 per share bid may be raised by $1 or $2.
One of the people said that sanofi-aventis executives will meet later this week to discuss how to proceed. The French drugmaker would prefer to enter friendly negotiations with Genzyme, the sources indicated, although a hostile offer still hasn't been ruled out. Spokesman Jean-Marc Podvin reiterated that the company's offer stands at $69 per share, although sanofi-aventis reportedly has financing in place for an improved bid.
"A serious offer is more likely to induce improved conversations," commented RBC Capital Markets analyst Michael Yee, adding that sanofi-aventis would need to increase its bid "into the $70s to get started."
Meanwhile, Genzyme CEO Henri Termeer told the Financial Times that a fairer valuation would be closer to Genzyme’s share price of $80 before the 2008 financial crisis, adding that he would be ready to step down from his position following confirmation of late-stage trial results for the multiple sclerosis drug Campath (alemtuzumab), which are expected in mid-2011.
"I’m not in any way offended" by the bid, he told the newspaper, although he suggested sanofi-aventis has "to recognise our value rather than be opportunistic.” Termeer noted that "the company is recovering in a significant way, and pulling in value." Any bid should reflect that value plus a control premium, the CEO commented, adding that Genzyme's board had held no discussions with an alternative "white knight" company.
Reference Articles
Sanofi-aventis said to weigh higher takeover bid for Genzyme - (Bloomberg)
Genzyme chief signals departure - (Financial Times)
Sanofi weighs higher Genzyme offer - report - (Yahoo!News)
**Published in "First Word"