Sanofi-Aventis investors have urged the drugmaker not to pay more than about $19 billion to land Genzyme, some $10 a share below the price wanted by the U.S. biotech group.

Two shareholders told Reuters they would not be happy if the French group payed much over $70 a share - or $18.7 billion in total - while a third was concerned about some valuations being put on Genzyme, which run to over $80 a share.

Sanofi's chief executive Chris Viehbacher has proposed paying Genzyme $69 per share and the two sides are discussing that $18.4 billion offer, sources familiar with the situation said on Monday.

"I would give him the benefit of the doubt that he will be reasonable, disciplined with the price," one top-15 shareholder in Sanofi said, asking not to be named.

"Common sense dictates that Genzyme would fit Sanofi. It would make sense for Sanofi to buy them but whether they can agree on a price is a totally different story."

Genzyme is likely to reject a deal at under $80 a share, a source familiar with the situation has said -- even if a "white knight" bid from a rival coming to Genzyme's rescue with a higher price looks unlikely.

Viehbacher is shaking up the Paris-based firm by cutting costs and diversifying. Buying Genzyme would be the biggest move he has made in his hunt to buy new sales to offset revenues lost as a result of patent expirations.

He has said he plans to make acquisitions worth up to $20 billion. This suggests he has room to raise his price to around $75 a share, and the shareholder acknowledged there was "a little bit" of leeway.

Genzyme's share price is already slightly above Sanofi's offer, trading down 0.2% at $70.20 on Nasdaq on Tuesday. It has shot up since Genzyme was mooted as potential prey in early July, jumping 15% to over $62 on July 23 after sources told Reuters and other media the two were in talks.

Haggle
France's AMF financial regulator said Sanofi was not obliged to make any comment on "rumors" about Genzyme under French rules as the target is based abroad.

"In this case, it is the law of the country in which the target company is based that applies," an AMF spokeswoman said.

A second top-30 Sanofi shareholder said a deal would be difficult if the price went much above $70.

"If you go much higher (than $70), that would make it a very tough call. We would need to see a lot of cost-cutting and incremental synergies to work," he said.

Bankers said Sanofi was unlikely to have any problems raising finance for what is expected to be a cash transaction.

One investment banker said that his company had sent a letter to Sanofi, hoping to provide financing for the deal "along with probably every other bank."

"We'd like to be involved, we have been talking to the company's treasurers. But nothing has been set in stone," the banker said, speaking on the condition of anonymity.

Many analysts think a deal will end up being done in the mid-$70s per share, assuming no counter-bidder emerges. GlaxoSmithKline, Johnson & Johnson and Pfizer have all been mentioned as potential interlopers.

But Pfizer's finance chief Frank D'Amelio indicated on Tuesday he wasn't interested, saying he was looking only at "bolt-on" acquisitions up to "several billion" dollars.

Genzyme activist shareholders Relational Investors and Carl Icahn hold 3.8% and 4.9% of Genzyme, respectively, giving them a key role in getting a deal, while French companies Total and L'Oreal, hold just under 6% and 9%, respectively, in Sanofi.