It should come as a surprise to no one that all the leaking going on last week as Genzyme and Sanofi-Aventis cautiously sidled to the deal table is seen by certain Wall Street insiders as an integral part of the complex mating ritual now underway. Leaks are a great way of checking shareholder responses. But, of course, they won't say that for the record.
"Both sides are using the press for price discovery. They are leaking numbers to see what reaction they get from shareholders," a UK hedge fund manager tells Reuters. "The consensus is that a deal will get done but Sanofi needs to avoid overpaying. There are some aggressive Genzyme shareholders talking the price up. They want to hit the magic number of around $20 billion."
As far as BNet's Jim Edwards is concerned, the magic number is $22 million. That's the golden handshake that awaits CEO Henri Termeer (photo) in the event of a buyout, regardless of the price, according to the 2009 proxy's change-of-control provision. And that will leave him more interested in completing any deal, writes Edwards, rather than the deal with the most money for shareholders.
If that were the case, though, those same Wall Street insiders wouldn't be bracing for weeks of quiet, behind-the-scenes talks with fresh leaks ahead. They certainly aren't buying the notion that Termeer will quickly fade away into retirement after shaking hands over a snap acquisition deal.