Sanofi eyes higher Genzyme bid

 
City A.M. Reporter
SANOFI-AVENTIS is considering whether to raise its $18.5bn (£12bn) bid for US drugmaker Genzyme as soon as next week.

France’s largest drugmaker is said to be leaning towards raising the $69-a-share offer by $1 or $2 a share. It has not ruled out a hostile bid but would prefer friendly negotiations, it is understood.

Sanofi executives and top advisers will meet later this week to discuss how to proceed and a final decision has not been taken.

A Sanofi spokesman declined to comment. He reiterated that Sanofi had made one offer at $69 a share, and had not made or discussed any other offer with Genzyme’s board, management or shareholders.

If Sanofi decided to match the market price of Genzyme shares, some analysts said management would be under pressure to begin negotiations or give Sanofi access to its books, particularly in the absence of any other bidder.

“If Sanofi raised the offer by $1 to $2, it would match what the market is indicating at the moment Sanofi should be paying,” Helvea analyst Karl Heinz Koch said.

“That by itself will put pressure on Genzyme management to at least sit around the table and explain why they believe $71 is not enough, and give Sanofi something they can base their pricing on.”

Separately, Genzyme chief executive Henri Termeer said he could step down in mid-2011 and Genzyme’s board had held no talks with an alternative “white knight” buyer.

Genzyme has rejected Sanofi’s cash offer as dramatically undervaluing the company, specialised in rare diseases, saying it did not justify entering merger talks.