Says the proposal is opportunistic and does not recognise potential of product pipeline
US biotechnology firm Genzyme has rejected a US$18.5bn (£12bn) takeover approach from French drugmaker Sanofi-aventis.
Genzyme said its board had unanimously concluded that Sanofi’s US$69-a-share proposal was ‘opportunistic’ and did not recognise the progress it has made to overcome its recent manufacturing problems, nor the potential of its new product pipeline, which includes alemtuzumab, which is the generic name for the multiple sclerosis drug Campath.
‘The Genzyme board is not prepared to engage in merger negotiations with Sanofi based upon an opportunistic proposal with an unrealistic starting price that dramatically undervalues our company,’ said Henri Termeer, Genzyme’s chairman and chief executive.
Sanofi-aventis said the offer represents a premium of almost 31% over the average share price to 22 July, which is the day prior to press speculation that it had made an approach to acquire Genzyme. The offer price takes into account the anticipated recovery in Genzyme's performance in 2011, the firm said.
Sanofi-aventis said it had made several unsuccessful attempts to engage Genzyme's management in discussions and was disclosing the contents of a letter to Termeer to inform Genzyme's shareholders of the ‘significant shareholder value and compelling strategic fit inherent in a combination of the two companies’.
‘Now is the right time for Genzyme to consider a transaction that maximises value for its shareholders,’ said Christopher Viehbacher, chief executive of Sanofi-aventis.
‘Sanofi-aventis believes strongly in this acquisition and its strategic and financial benefits. We remain focused on entering into constructive discussions with Genzyme in order to complete this transaction.’
Sanofi-aventis said it would make Genzyme its global centre for excellence in rare diseases.
Genzyme has drugs for Gaucher’s and Fabry’s, two rare genetic enzyme deficiency diseases.
It is unclear whether Sanofi’s management will now choose to negotiate or make a hostile bid.
Genzyme has more than 12,000 employees worldwide and revenues of US$4.5bn in 2009.