Sanofi Repeats Genzyme Offer Amid Talk Of New Bid
Sanofi-Aventis has not changed its offer of $69 per share for drugmaker Genzyme, a Sanofi spokesman said Monday, declining to comment on a report it may be lining up more funding for a raised bid.
"We have one offer at $69. No other offer has been made ... We would like to enter into a dialogue," said Sanofi spokesman Jean-Marc Podvin. He declined to comment on a Wall Street Journal report released over the weekend that said Sanofi had approached Citigroup and Bank of America Corp about additional financing as it contemplates raising its $18.5 billion bid.
Industry analysts said the fact that Sanofi may have roped in more lenders did not change prospects for a deal fundamentally, since several banks were already willing to provide ample funds, giving flexibility for a higher offer.
Sanofi has said it already has financing from J.P. Morgan Chase & Co, BNP Paribas SA and Societe Generale SA.
Staying Friendly?
The French drugmaker wants to reach a friendly agreement but has not ruled out a hostile offer made directly to Genzyme shareholders, sources previously told Reuters. Sanofi has been soliciting views from Genzyme shareholders in recent weeks.
Last month, Genzyme rejected Sanofi's $69 per share offer as dramatically undervaluing the U.S. company and not a bid that justified entering merger talks. Sources previously told Reuters that Genzyme sought an offer of at least $75 per share before Sanofi could review its books, while some investors want $80 a share in a deal.
A Reuters poll last month showed analysts and shareholders believed Sanofi could win Genzyme with a sweetened offer of around $78 a share. Sanofi wants to buy Genzyme, a leading maker of drugs for rare diseases, to fuel growth as some of its key treatments lose patent protection.
Ben Yeoh, an industry analyst at Atlantic Equities, said Sanofi's ability to raise the money needed for its cash offer was never in doubt but broadening the range of lenders could help keep the cost of borrowing to a minimum.
"Pharma companies in general are not having problems issuing debt right now," Yeoh said. "Having a syndicate of lenders gives a little bit more flexibility on the mix ... particularly having some of the bigger global banks."
Banks are in general more willing to lend for big takeovers these days and Sanofi Chief Executive Chris Viehbacher earlier this month said he aimed to take advantage of the "cheap debt" on offer.
"The fact that big corporations today can borrow money pretty cheaply means that a lot of deals that wouldn't have been accretive in the past actually are now suddenly accretive," to earnings, he recently told investors in London.
