The Sanofi-Aventis ($SNY)-Genzyme ($GENZ) buyout saga looks as if it will continue into the new year. The French drugmaker's $18.5 billion offer for the Cambridge, Massachusetts biotech expires tonight, and the two sides are still squabbling.
As the Boston Globe notes, because shares of Genzyme are still trading above the $69 that Sanofi has offered, it is doubtful that many investors will opt to cash out. Bo Piela, a Genzyme VP, said the company did not know how many of its stockowners have presented their shares to Sanofi. However, he stressed Sanofi's offer remains inadequate.
Fabrice Seiman, portfolio manager of the Paris-based hedge-fund Lutetia Capital and a Genzyme shareholder, agrees--even though he thinks the merger makes sense. "[A]t this price the offer is insufficient; Sanofi needs to come back with a higher offer." Seiman estimates that Genzyme is worth between $75 and $80 per share, according to Dow Jones.
Prolonging Sanofi's tender by 50 days at the same price would give extra time to seek a compromise, Reuters notes. CEO Henri Termeer (photo) recently told France's Le Figaro that he would be open to linking the performance of the experimental multiple sclerosis drug Campath to any buyout offer. Markus Manns, a fund manager at Union Investment in Frankfurt, believes this could be a workable solution. "We have seen it with other deals already, like Fresenius...when they bought APP. It certainly makes sense, particularly if companies don't agree on the sales potential of an individual drug, like Campath," he said, as quoted by Reuters.
Sanofi and Genzyme do indeed have radically different sets of sales forecasts for Campath. Genzyme has pegged peak sales at $3 billion, while Sanofi says it's more like $700 million. Late-stage data on the drug is due next year.