By Jessica Hall
PHILADELPHIA, July 28 (Reuters) - France's Sanofi-Aventis plans to press ahead with a formal offer for Genzyme after its informal overture failed to strike interest, a source familiar with the situation said on Wednesday.
The board of Sanofi met in Paris on Wednesday and voted to make a formal offer for Genzyme, though details of what a proposal would look like were not immediately available. A second source cautioned that no formal proposal had been made yet and plans could still change.
Sanofi, which is scheduled to report second-quarter earnings on Thursday, declined to comment. Genzyme, which has a market capitalization of $18 billion, could not be immediately reached for comment.
Analysts see Sanofi in greater need of a major acquisition than some of its rivals as it girds for generic competition for some of its key products.
Sanofi's proposal was expected to come in the form of a 'bear hug' letter that would lay out proposed takeover terms and try to pressure Genzyme to open negotiations, the first source said.
Genzyme failed to respond to Sanofi's informal overture, sources previously told Reuters. Genzyme, which is trying to sell three non-core businesses, is not looking to sell the company, sources previously said.
Reports that Sanofi was making a run at Genzyme surfaced on Friday. The news has sent the U.S. company's shares up more than 30 percent since then as investors figured the company would garner a hefty premium for its portfolio of expensive treatments for rare genetic disorders and a pipeline of drugs in development.
Analysts see Genzyme fetching anywhere from $60 to $85 a share, depending on their view of the value of the company's experimental drugs, the risks associated with its recovery from a manufacturing crisis and the entry of other bidders.
Some company watchers, however, focus on a narrower price range and say Genzyme shareholders may be willing to accept a price of $70 to $80 per share, particularly newer investors who were drawn to the company when it was targeted by activist investor Carl Icahn.
Shares of Genzyme gained 5 percent to $71.20 in extended trading on Wednesday after news of the board meeting.
(Reporting by Jessica Hall; Editing by Gary Hill, Phil Berlowitz)
(For more M&A news and our DealZone blog, go to http://www.reuters.com/investing/news/mergers) Keywords: SANOFI/GENZYME (jessica.hall@thomsonreuters.com; 215-922-1086; Reuters Messaging: jessica.hall.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
PHILADELPHIA, July 28 (Reuters) - France's Sanofi-Aventis plans to press ahead with a formal offer for Genzyme after its informal overture failed to strike interest, a source familiar with the situation said on Wednesday.
The board of Sanofi met in Paris on Wednesday and voted to make a formal offer for Genzyme, though details of what a proposal would look like were not immediately available. A second source cautioned that no formal proposal had been made yet and plans could still change.
Sanofi, which is scheduled to report second-quarter earnings on Thursday, declined to comment. Genzyme, which has a market capitalization of $18 billion, could not be immediately reached for comment.
Analysts see Sanofi in greater need of a major acquisition than some of its rivals as it girds for generic competition for some of its key products.
Sanofi's proposal was expected to come in the form of a 'bear hug' letter that would lay out proposed takeover terms and try to pressure Genzyme to open negotiations, the first source said.
Genzyme failed to respond to Sanofi's informal overture, sources previously told Reuters. Genzyme, which is trying to sell three non-core businesses, is not looking to sell the company, sources previously said.
Reports that Sanofi was making a run at Genzyme surfaced on Friday. The news has sent the U.S. company's shares up more than 30 percent since then as investors figured the company would garner a hefty premium for its portfolio of expensive treatments for rare genetic disorders and a pipeline of drugs in development.
Analysts see Genzyme fetching anywhere from $60 to $85 a share, depending on their view of the value of the company's experimental drugs, the risks associated with its recovery from a manufacturing crisis and the entry of other bidders.
Some company watchers, however, focus on a narrower price range and say Genzyme shareholders may be willing to accept a price of $70 to $80 per share, particularly newer investors who were drawn to the company when it was targeted by activist investor Carl Icahn.
Shares of Genzyme gained 5 percent to $71.20 in extended trading on Wednesday after news of the board meeting.
(Reporting by Jessica Hall; Editing by Gary Hill, Phil Berlowitz)
(For more M&A news and our DealZone blog, go to http://www.reuters.com/investing/news/mergers) Keywords: SANOFI/GENZYME (jessica.hall@thomsonreuters.com; 215-922-1086; Reuters Messaging: jessica.hall.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.