Board at Genzyme rejects unsolicited Sanofi-Aventis offer, urges shareholders to do same

Genzyme board rejects Sanofi $69-a-share offer

TRENTON, N.J. — Biotech firm Genzyme Corp. on Thursday said its board of directors has rejected Sanofi-Aventis SA’s $69 per share offer and has recommended that Genzyme shareholders do not sell their shares to the French drugmaker.

Genzyme, based in Cambridge, Mass., said its board voted unanimously to reject the unsolicited offer.

The move comes three days after Sanofi-Aventis, the world’s fourth-biggest drugmaker, initiated a hostile takeover attempt for Genzyme, escalating a three-month battle to acquire the maker of lucrative drugs for rare genetic disorders.

Sanofi, based in Paris, initially made the $69 offer privately in July, then repeated it publicly in late August, but was rebuffed by Sanofi’s board twice.

As before, Genzyme said Thursday that the $69 price was too low.

Sanofi-Aventis spokesman Jack Cox said he could not immediately comment on the Genzyme announcement.

Genzyme shares jumped late in the day, rising 61 cents to $72.36 a share in regular trading, as traders apparently expected that Sanofi would be forced to raise its offer. In after-hours trading, shares jumped another 64 cents, to $73.

In a press release, Genzyme said the price “is inadequate and opportunistic, substantially undervalues the company, fails to recognize the company’s plan to increase shareholder value, and is not in the best interests of Genzyme or its shareholders.”

“The offer fails to compensate shareholders for the value of Genzyme’s existing business, which delivered compound annual revenue growth of 23 percent from 2002-2009. This business includes a unique and long-standing leadership position in the orphan-drug market; 12 market-leading products with durable revenue streams, and a long history of research and development productivity and success,” the statement added.

The statement also said Sanofi’s offer doesn’t take into account the value of experimental drugs Genzyme now has in late-stage development, including “three breakthrough products” expected to be launched by the end of 2013. One of those is alemtuzumab, a drug being developed to treat multiple sclerosis.

Genzyme said it would hold an analyst and investor meeting in New York soon to provide its financial outlook and other pertinent information. The company is scheduled to release its third-quarter results on Oct. 21, after which it plans to start a series of meetings with shareholders.