Sanofi-Aventis goes hostile with $69/share offer for Genzyme

In what now looks set to be a protracted battle to gain control of troubled US biotechnology firm Genzyme (Nasdaq: GENZ), French drug major Sanofi-Aventis (Euronext: SAN) has gone hostile, this morning announcing that it has commenced a tender offer at $69 per share, or a total of $18.5 billion, which the Genzyme board has previously rejected as not enough (The Pharma Letters passim). The offer represents a 31% premium to the average price over the month before speculation began that Genzyme had received the bid approach.

Declaring its “strong preference is to engage in constructive discussions with Genzyme, Genzyme's board and management team's continued refusal to do so has led Sanofi-Aventis to commence the tender offer,” the French company said. A meeting between the two chief executives on September 20 proved unproductive, despite several attempts by Sanofi-Aventis to advance discussions, it claims.

Sanofi-Aventis executives met recently with shareholders who collectively own more than 50% of Genzyme's outstanding shares. The conversations revealed that those shareholders were frustrated with Genzyme's persistent refusal to have meaningful discussions regarding takeover proposal, and indicated they were prepared to sell at a “reasonable price.”