Genzyme Breaks Silence to Rebuff Sanofi
Tuesday, 31 August 2010

US biotech Genzyme broke its five-week silence to reject an $18.5 billion takeover proposal by French drugmaker Sanofi-Aventis on Monday, dismissing it as opportunistic and too low.

Sanofi Chief Executive Chris Viehbacher confirmed his $69 per share non-binding cash offer for Genzyme on Sunday, hinting he could make a hostile takeover bid following several unsuccessful attempts to hold talks with Genzyme management.

Genzyme hit back on Monday, saying that Sanofi's proposal showed no improvement in price since Viehbacher first wrote to management in July and failed to form the basis for talks.

"The Genzyme board is not prepared to engage in merger negotiations with Sanofi based upon an opportunistic proposal with an unrealistic starting price that dramatically undervalues the company," Genzyme CEO Henri Termeer said in a letter to Viehbacher published on Monday.

Sources previously told Reuters that Genzyme wants an offer of at least $75 per share before Sanofi could review its books. Some shareholders want as much as $80 a share to clinch a deal.

Genzyme said on Monday that Sanofi and its advisers claim Sanofi is willing to pay more but that the company is unwilling to "bid against" itself.

The French group stopped short of making a direct approach to Genzyme shareholders on Sunday, and Viehbacher sounded a conciliatory tone in an interview with Les Echos newspaper that nonetheless suggested there was a limit to his patience.

"We want to show that we are determined and serious, without being threatening straightaway. Quite some time can go by yet," Viehbacher -- dubbed the "Smiling Killer" by some staff for his cost-cutting zeal -- said in the interview.

Genzyme shares were up 4.3 percent to $70.55 in pre-market trade in New York, following its rejection of Sanofi's offer.

Sanofi shares were up 0.9 percent at 45.655 euros, while the Stoxx 600 European health care index.


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