Sanofi's Pursuit of Genzyme (GENZ) Gets 'Hostile'; Higher Bid Seen
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Taking the next step in its quest to acquire Genzyme (Nasdaq: GENZ), Sanofi-Aventis (NYSE: SNY) went 'hostile' with its takeover bid, going directly to shareholders with its unchanged $69 per share offer.
Genzyme has responded to the effort, telling shareholders to take no action on the unsolicited tender offer.
Sanofi-Aventis said this step was needed as Genzyme's board and management is unwilling to engage in constructive discussions. Sanofi said a September 20 meeting between the two companies CEO "proved unproductive," despite its effors to advance the discussions.
Sanofi said meetings with shareholders, who collectively own more than 50 percent of Genzyme's outstanding shares, reveal that they are frustrated with the company's refusal to enter meaningful talks.
It is unlikely that Sanofi will be effective with its $69 tender offer, as shares of Genzyme currently trade in the market at $71.28 as most market participants expect a higher bid.
Sanofi contends that it "won't bid against itself," yet its overtures indicate it is eager to bring Genzyme into the fold.
Today analysts at Robert W. Baird, which has been Neutral on the shares, said the latest move by Sanofi shows the two sides are still very far apart on valuation although it could serve as a prelude to a higher bid, possibly in the mid-$70s.
Other market analysts have been calling for a takeover bid closer to $80 per share to get the deal done.
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Genzyme has responded to the effort, telling shareholders to take no action on the unsolicited tender offer.
Sanofi-Aventis said this step was needed as Genzyme's board and management is unwilling to engage in constructive discussions. Sanofi said a September 20 meeting between the two companies CEO "proved unproductive," despite its effors to advance the discussions.
Sanofi said meetings with shareholders, who collectively own more than 50 percent of Genzyme's outstanding shares, reveal that they are frustrated with the company's refusal to enter meaningful talks.
It is unlikely that Sanofi will be effective with its $69 tender offer, as shares of Genzyme currently trade in the market at $71.28 as most market participants expect a higher bid.
Sanofi contends that it "won't bid against itself," yet its overtures indicate it is eager to bring Genzyme into the fold.
Today analysts at Robert W. Baird, which has been Neutral on the shares, said the latest move by Sanofi shows the two sides are still very far apart on valuation although it could serve as a prelude to a higher bid, possibly in the mid-$70s.
Other market analysts have been calling for a takeover bid closer to $80 per share to get the deal done.
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Robert W Baird, Genzyme/Sanofi-Aventis
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