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Sanofi presses Genzyme over takeover bid

Says shareholders kept out of process

The board of directors of drug maker Genzyme says that Sanofi’s $69-per-share bid undervalues the company. The board of directors of drug maker Genzyme says that Sanofi’s $69-per-share bid undervalues the company. (Antoine Antoniol/ Bloomberg News)
By Matthew Perrone
Associated Press / November 9, 2010

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WASHINGTON — French drug maker Sanofi Aventis SA is putting new pressure on biotech drug maker Genzyme to accept its takeover offer, criticizing several defensive maneuvers outlined by the company’s board of directors, which rejected the $18.5 billion buyout last month.

In a letter released yesterday, Sanofi Aventis reiterated its call for Genzyme to open talks between the companies.

Last month, Cambridge, Mass.-based Genzyme made it clear it would fight Sanofi’s hostile takeover effort using several options outlined in a company regulatory filing.

Genzyme, which specializes in drugs for rare diseases, said its board would consider adopting a “poison pill,’’ or a plan that would prevent Sanofi or another outside interest from acquiring a majority stake in the company.

Genzyme also said it could use Massachusetts antitakeover laws to prevent Sanofi from completing a buyout rejected by board members.

In the letter, Christopher Viehbacher, Sanofi’s chief executive, argued that the company is inappropriately cutting investors out of the decision-making process.

“If we are unable to have a direct dialogue with you, in all fairness you should allow your shareholders the opportunity to decide for themselves whether or not to accept our proposal,’’ Viehbacher said.

Sanofi has offered to buy Genzyme for $69 a share, but Genzyme said the company’s future outlook makes it worth $89 a share.

In a response released yesterday evening, Henri Termeer, Genzyme’s chief executive, reiterated that Genzyme’s board of directors believes that $69 per share undervalues the company.

In a letter to Viehbacher, Termeer called the offer “opportunistic and inadequate.’’

Although Genzyme shares have fallen because of a string of recent manufacturing problems, company management says Sanofi’s offer does not take into account the company’s recovery and pipeline of upcoming products, including an experimental multiple sclerosis drug called alemtuzumab.

Shares of Genzyme Corp. fell 63 cents to $71.06. Shares of Sanofi Aventis fell 37 cents to $35.51.