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Sanofi-aventis begins US$ 18.5 billion hostile bid for Genzyme

Paris, FranceTuesday, October 5, 2010, 09:00 Hrs  [IST]

Sanofi-aventis has commenced a tender offer for all outstanding shares of common stock of Genzyme Corporation for US$ 69 per share, net to the seller in cash, without interest and less any required withholding taxes. The transaction is valued at approximately US$ 18.5 billion. The offer, which was unanimously approved by sanofi-aventis’ Board of Directors, is scheduled to expire at 11:59 pm, New York City time on December 10, 2010.

While sanofi-aventis’ strong preference is to engage in constructive discussions with Genzyme, Genzyme’s Board and management team’s continued refusal to do so has led sanofi-aventis to commence the tender offer.  A meeting between the two CEOs on September 20, 2010, proved unproductive, despite several attempts by sanofi-aventis to advance discussions. Sanofi-aventis executives met recently with shareholders who collectively own more than 50 per cent of Genzyme’s outstanding shares. The conversations revealed that those shareholders were frustrated with Genzyme’s persistent refusal to have meaningful discussions regarding sanofi-aventis’ proposal. Sanofi-aventis sent a letter to Genzyme’s Board informing it of the company’s intention to commence the tender offer, a copy of which is included with this release.

“Sanofi-aventis is committed to a transaction with Genzyme, and we believe that our offer reflects both Genzyme’s upside potential and its current operational challenges,” said Christopher A Viehbacher, chief executive officer of sanofi-aventis. “Our strong preference has been and continues to be to work together constructively with the Genzyme Board to reach a mutually agreeable transaction, but our attempts to do so have been blocked at every turn. Our recent meetings with Genzyme shareholders demonstrate that they support a transaction and are frustrated by Genzyme’s unwillingness to engage in constructive discussions with us. This has left us with no choice but to present the offer directly to Genzyme’s shareholders. We strongly believe our offer price of $69 per share in cash represents a compelling value for Genzyme shareholders.”

The sanofi-aventis tender offer represents a premium of 38% over Genzyme’s unaffected share price of US$ 49.86 on July 1, 2010. Sanofi-aventis’ offer also represents a premium of almost 31% over the one-month historical average share price through July 22, 2010, the day prior to press speculation that sanofi-aventis had made an approach to acquire Genzyme.

Today, sanofi-aventis will file with the US Securities and Exchange Commission (SEC) a Tender Offer Statement on Schedule TO, containing the Offer to Purchase, form of Letter of Transmittal and related tender offer documents, setting forth in detail the terms and conditions of the tender offer.  The tender offer is conditioned on, among other things, (i) tender of a majority of the outstanding shares of Genzyme common stock, calculated on a fully-diluted basis, (ii) Genzyme’s Board of Directors having approved the tender offer and the subsequent merger described in the tender offer document filed by sanofi-aventis today with the “SEC” such that the restrictions on business combinations with interested shareholders under the General Laws of Massachusetts will be inapplicable to such transactions, (iii) the receipt of required regulatory approvals and (iv) Genzyme not having entered into any transaction or taken other actions that would impair completion of the tender offer or diminish the value of Genzyme to sanofi-aventis. Sanofi-aventis has secured financing for its offer from BNP Paribas, J.P. Morgan Europe Limited and Société Générale.

Sanofi-aventis’ lead financial advisors for this transaction are Evercore Partners and J.P. Morgan and its legal advisor is Weil, Gotshal & Manges LLP.

 
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