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Genzyme and sanofi-aventis are getting closer

The folks at Bloomberg and the Wall Street Journal have their “inside sources” (I was never good at espionage), so we’ll let them tell you what’s going on with the continuing saga of sanofi-aventis trying to acquire a (so far) reluctant Genzyme.

Bloomberg:

Genzyme Corp. agreed to give Sanofi-Aventis SA access to confidential information, bringing the companies a step closer to a deal five months after the French drugmaker offered to buy Genzyme for $18.5 billion.

The companies may reach a deal in the next two weeks, said three people with knowledge of the situation who spoke on the condition of anonymity because the talks are private. The confidentiality pact means that Sanofi and Genzyme are aligned on broad terms, with Sanofi likely to slightly raise its $69-a- share offer, the people said. The French drugmaker may also make additional payments based on the success of a Genzyme experimental multiple sclerosis drug, the people said. The companies have yet to agree on final terms.

Wall Street Journal blog:

It Might Actually Happen: Genzyme and Sanofi-Aventis have agreed in principle to a deal and plan to nail down the details in the next week, though there is still no guarantee of a final agreement, the WSJ reports, citing people familiar with the situation. Genzyme has previously rejected Sanofi’s $69-per-share offer as too low and instead wanted something more like $80 to sell, but recently “the two sides have made significant progress in bridging the value gap,” the paper says.

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February 1, 2011 Posted by | Corporate, M&A activity | , , , , , | 1 Comment

Season’s mergings

So, I just finished writing one of my articles for the January issue, which is on the Johnson & Johnson and Crucell acquisition bid for Crucell. As I noted in the blog (here), one of the sticking points in the M&A journey for these two companies has been the opinion of the second-largest shareholder, Van Herk Groep, that J&J just isn’t offering a satisfactory per-share price in its bid.

Well, in the few months that have passed since the two companies told everyone they were courting, there have been some manufacturing problems at a Crucell plant in South Korea that were bad enough to affect third-quarter earning and year-end projections.

However, J&J went ahead with a formal acquisition bid earlier this month, and didn’t lower its offer a single penny.

Now, one can only speculate whether Van Herk has still been holding to its opinion that J&J is being a Scrooge. After all, I haven’t heard anything so far that’s made me think their collective minds have changed. And I don’t know how much they think is fair…

…but one wonders whether Van Herk will view this bid as a holiday gift (no change despite manufacturing problems), or still keep looking for a bigger box under the tree for itself.

At least I wonder.

Seasons greetings, everyone, belatedly to those who’ve already celebrated their respective holidays and proactively to everyone else. And let’s hope for a Happy New Year in pharma, whether J&J and Crucell tie the knot in February or not.

December 20, 2010 Posted by | Corporate, M&A activity | , , , , | Leave a comment

Storming Genzyme’s walls

I can’t help but hear in my head right now the parting words of Miracle Max and his wife to the heroes of the movie The Princess Bride, when they shout out, “Have fun storming the castle, boys!”

I don’t know that sanofi-aventis is having any fun yet as it looks to acquire Genzyme, but at least it seems unlikely that any reinforcements will be arriving for the target company as it digs its trenches and sanofi, in turn, begins the first stages of its assault.

Yes, the deal has finally gone into hostile takeover mode.

Ever since sanofi made it clear this summer that it wants to acquire Genzyme for $69 per share, many analysts have been equally clear in their opinion that no white knight is likely to show up and complicate the issue for sanofi. Some have dropped names like GlaxoSmithKline, Johnson & Johnson and Pfizer, but none have yet surfaced, and at least one executive at GlaxoSmithKline has said openly that the cost of Genzyme would be too high for his company.

So, with no other champion to vie for the hand of Genzyme, sanofi decided on Oct. 7 to go ahead with an assault on the castle, launching the hostile takeover effort and telling shareholders this is a good deal, since it represents a 38 percent premium over where Genzyme’s share price was sitting before acquisition speculations surfaced in July.

Points for persistence go to both sides. Genzyme insists it is being undervalued, and sanofi is still sticking to its offer of $69 per share. However, it is unclear how realistic that price tag is or how attractive it will be to shareholders, given that Genzyme has traded above that mark consistently since the acquisition news first hit the streets.

So, one prediction still seems to be holding out: That no one seems motivated to challenge sanofi and start a bidding war. What remains to be seen is whether sanofi will continue to hold fast on $69 per share as it picks at Genzyme’s defenses, or whether it will end up conceding to the opinion of many analysts and market watchers that a figure closer to $80 than to $70 will be needed to move either the leaders of Genzyme…or its stockholders.

Of course, there’s always the possibility that sanofi will simply move on to another castle, as Datamonitor  suggested in the article we ran in late August on this acquisition tale.

(By the way, with these latest developments, it might be a good time to cast a vote in our poll here if you haven’t already done so)

October 7, 2010 Posted by | Corporate, M&A activity | , , , , , | Leave a comment