Sanofi extends deadline for Genzyme offer
Published 13/12/2010 | 09:25
Sanofi-Aventis, the French drugmaker making a hostile bid for Genzyme Corp, extended the deadline for the US biotechnology company’s shareholders to tender their stock to January 21.
The offer of $69 a share, or about $18.5bn, was set to expire December 10. About 2.2 million shares, or 0.9pc of the stock outstanding, had been tendered by the midnight deadline, the Paris-based company said in a statement today.
Sanofi, France’s largest drugmaker, took its offer for Genzyme directly to shareholders on October 4, after the company’s chief executive officer, Henri Termeer, spurned the bid as too low and refused to negotiate.
The offer, made public August 29, undervalues Genzyme’s stable of experimental drugs and ignores expected revenue growth after the company fixed manufacturing flaws that caused drug shortages, Termeer said.
“Genzyme values itself much higher than the current offer from Sanofi,” said Michael Obuchowski, chief investment officer at First Empire Asset Management in Hauppauge, New York, in an interview last month. “And investors value Genzyme higher than the current offer from Sanofi.”
Genzyme shares have traded above $69 since the offer was made public, suggesting Termeer has shareholders who support his refusal to negotiate with Sanofi at that price.
The US company wants Sanofi to both increase its offer and to make a later payment based on sales goals for its experimental multiple sclerosis drug Campath, three people with direct knowledge of the matter said December 7.
Sanofi is unwilling to meet both demands, they said. While executives of the companies aren’t in talks, their advisers have been in contact, the people said.
Sanofi Chief Financial Officer Jerome Contamine told Bloomberg News on December 1 he still considered the $69-a-share bid a “very good price.”
Genzyme shares fell 17 cents to $69.82 on December 10 in Nasdaq Stock Market composite trading. Sanofi rose 5 cents to 49.36 euros at 9:13am in Paris trading.
Sanofi is seeking acquisitions to replace revenue the company is losing as some of its biggest-selling products, such as the blood thinner Plavix and the cancer drug Taxotere, face competition from generic medicines.
Genzyme’s drugs are less likely to face generic competitors because they’re made from living cells and are harder to copy than pills made from chemicals.
The US Food and Drug Administration designated the therapies as orphan drugs because they’re for diseases without other treatment options, giving them more patent protection.
The deal would be the biggest hostile takeover in the drug industry since the transaction that created Sanofi-Aventis in 2004, according to Bloomberg data. Sanofi-Synthelabo acquired Aventis for about $64bn after raising its bid once.