After several unsuccessful approaches in recent weeks, Sanofi-Aventis released on Sunday a proposal for acquisition of U.S. biotech group Genzyme of $ 18.5 billion (14.5 billion euros), which should increase pressure on its target.
The French group is willing to pay $ 69 per share in cash to take control of Genzyme, a specialist in treatments for rare diseases.This price corresponds to the one discussed at the end of July, lorsqu'ont began to circulate on the market reports of interest from Sanofi.
He explained Sunday that sent its proposal to the CEO of Genzyme, Henri Termeer, July 29 "after several unsuccessful attempts to initiate discussions.
"Sanofi-Aventis makes public the contents of this letter in order to inform shareholders of Genzyme significant value and strong strategic fit that would bring together the two companies," he said in a statement.
Genzyme was not immediately available to respond to the initiative of Sanofi.
This ensures ready to consider "all options as it deems appropriate in order to complete this merger.
"The most important is that the shareholders of Genzyme hear us," said Chief Executive Chris Viehbacher, during a teleconference.
Sources had earlier told Reuters that Genzyme wanted an offer of at least $ 75 per share before opening accounts to Sanofi.
Interviewed Sunday on the possible evolution of his approach, Chris Viehbacher said: "There is no reason to discuss the next step while we are at this stage there is no reason today (…) discuss a different price."
Sanofi, the world number six from the pharmacy, is seeking new sources of growth as patents of several of its key drugs, including anticancer Taxotere or anticoagulant Plavix, due to expire in coming years.
THE COURSE OF GENZYME IS FALLING UNDER 69 DOLLARS
The group has the means of its ambitions of its debt (6.2 billion euros at 30 June) it would probably raise its offer if necessary Genzyme.
He said Sunday that it had secured financing for its offer, which he has involved several large banks including BNP Paribas, JPMorgan Chase & Co. and Societe Generale.
The price of 69 dollars is proposed to Genzyme as calculated by Sanofi a premium of 38% during the 1st July, before the first rumors of acquisition.
This states that its offer represents 36 times the earnings per share (EPS) estimate of Genzyme and 20 times 2010 estimated EPS for 2011 based on the consensus of analysts.And he adds that a redemption price of $ 69 per share would have a positive impact on its own results.
On the Nasdaq National Market, under the Genzyme rose to nearly $ 71 in late July at the height of speculation on interest paid to Sanofi, but declined since then, closing Friday at 67.62 dollars.
In the letter to CEO of its target, it has also made public Sunday, the French group also notes that "Genzyme underperformed relative to its peers for several years."
"We look forward to engaging in constructive discussions with Genzyme in order to perform this operation," assured Chris Viehbacher.
The showdown now publicly committed between Sanofi and Genzyme could be influenced by shareholder activists of the American group, the foremost among the fund Relational Investors and investor Carl Icahn, with 3.8% and 4.9% of capital respectively.
For their part, major shareholders are Sanofi as L'Oreal and Total are reserved about the project and fear to see pay too high a price, said last week, banking sources told Reuters.
Genzyme, headquartered in Cambridge, Massachusetts, completed in 2009 a turnover of 4.5 billion dollars and employs over 12,000 people.
Among its major drugs include treatments for Gaucher disease and Fabry disease.Its pipeline of drugs under development include a treatment of multiple sclerosis.
* The release of Sanofi (PDF): here
* Chart valuations in the health sector:
here
* Chart acquisitions of biotechnology companies:
here
* Graph of recovery of the offer from Sanofi:
here
* Stock charts comparing the leading biotech companies:
link.reuters.com/zyf23n
* Stock charts comparing the major pharmaceutical groups:
here
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