The bidding on Genzyme has begun, with Sanofi putting down a hard offer of $69 a share, according to the Wall Street Journal. But Reuters and others have their own sources who say that Genzyme's board wants to hold out for at least $80 a share, and possibly wait to see if another bidder steps up to drive up the price even higher.
For now, all the top executives are staying quiet about the bidding, but insiders are opening up to a wide range of the business press. As a result, we find out from the Journal that Sanofi has dropped the idea of a ‘bear hug' letter spelling out an unsolicited offer and chose a private letter to start the formal negotiations.
Two of Sanofi's big institutional investors have been talking as well, informing Reuters that they've been advising Sanofi CEO Chris Viehbacher to pay no more than $70 a share, or about $18.7 billion, for the big biotech. But the investors backing Genzyme are likely going to be scowling over any price under $80, or $21.3 billion.
"I don't think the 80s are unrealistic," says Sven Borho, an analyst for OrbiMed, an equity firm which is hanging on to 2.5 million shares of Genzyme, which are now worth $71.50 after the fresh round of buyout stories made the rounds. As Bloomberg also notes, though, Genzyme CEO Henri Termeer has said the company isn't for sale.
It looks like this story has a long way to go before we find out how it ends.