Genzyme spurns buyout offer

The
biotechnology company Genzyme has rejected a buyout offer of $18.5 billion, or
$69 a share, from the French drug maker Sanofi-Aventis, saying the bid
undervalued the company.

The
chief executive of Genzyme, Henri A. Termeer, said in a letter to his
counterpart at Sanofi, Christopher Viehbacher that the Genzyme board was not
prepared to “engage in merger negotiations with Sanofi based upon an
opportunistic proposal with an unrealistic starting price that dramatically
undervalues our company.”

The
offer of $69 a share, Mr. Termeer said, “Provides no new information and no
improvement in price, and therefore fails to establish a basis for engagement
by the Genzyme board.” Sanofi approached Genzyme in June, and the two companies
were engaged in friendly merger talks. But, according to Mr. Viehbacher, the
discussions were stifled by Genzyme’s management. “We are disappointed that you
rejected our proposal on 11 August without discussing its substance with us,”
he wrote in a letter to Mr. Termeer. “Our financial advisers finally met
briefly on 24 August, but the meeting simply served as further confirmation
that as throughout you remain unwilling to have constructive discussions.”

Executives
of Sanofi have indicated there is a limit to what they would pay saying Sanofi
was not prepared to go to “any length” to acquire Genzyme.

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A sign marks the headquarters of Genzyme in Cambridge, Massachusetts.
Photo: File
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