Sanofi-Aventis shareholders L'oreal and Total worry that the French drugmaker will pay too much for U.S. biotech company Genzyme and are not convinced it is the best fit, bankers said.

Cosmetics giant L'oreal and oil company Total together own about 15 percent of Sanofi and have representatives on its board. Their misgivings could hamper the ability of Sanofi Chief Executive Chris Viehbacher to raise his bid for Genzyme above a $70 per share limit authorized by the board.

Shareholders "will have a view on not spending too much money," one banker close to L'oreal said. One of the sources also said these shareholders believe Sanofi might be better off buying Genzyme rival Shire, which is cheaper.

Sanofi has offered to buy Genzyme, one of the world's biggest biotech companies and a leading maker of drugs for rare diseases, for $69 a share, according to sources familiar with the situation, valuing the company at about $18.4 billion.

Genzyme is looking for a figure of at least $80 and wants an opening offer of $75 before it will even open its books to the company, people familiar with the situation say.

Bloomberg News reported earlier on Wednesday that Sanofi was not willing to pay more than $70 a share and would consider alternative targets, such as U.S. biotech company Celgene or Allergan, maker of the Botox anti-wrinkle drug.

Genzyme shares fell as much as 2% after the Bloomberg report, but reversed course and closed up 0.3% as investors doubted that either alternative would make a suitable target for a Sanofi board so concerned about price.

Sven Borho, a portfolio manager at Orbimed Advisors, which holds 2 million Genzyme shares, saw the report as an attempt by Sanofi's advisers to keep Genzyme's share price under pressure.

"It worked for a second," Borho said. "There was a lot of shouting in our office, but then a minute later everyone said, 'nice try, but Sanofi is not going to go and buy Allergan or Celgene instead.'"
Both companies would be far more expensive than Genzyme, which has a market value of $17 billion. Allergan has a market value of $19 billion and Celgene has a market value of $23.5 billion.