Genzyme: Anybody seen a White Knight?

10/07/2010

The WSJ reports that Genzyme while not exactly looking for a White Knight - well - is looking for a White Knight, if for no other reason than to establish their market value to force Sanofi to up its offer.

"The company board, in order to be fully informed about the company's value in comparison with the company's stand-alone strategic plan, has authorized the company's advisers and management to probe and evaluate alternatives for the company and its assets, which will include contacting third parties," Genzyme said in a Securities and Exchange Commission filing. "These probes do not constitute authorization of a process to sell the company or any of its assets."

The paper also reported that Chris Viehbacher had offered Henri Termeer $69 to $80 per share to open negotiations. Termeer rejected Viehbacher's offer to open in this range because the range's low end wasn't good enough. If the Sanofi CEO "had said $75 to $80, it would have been a completely different ball game,'' a source commented. "It's pretty clear Viehbacher wants to get it [Genzyme] for between $69 and $75" a share.

Termeer is expected to offer "an updated view of what 2011 will look like." And the outlook will be far rosier than what company officials described this May, based on manufacturing improvements and signficant cost cuts. Viehbacher has promoted Sanofi's offer by claming $69 represents 19 times Genzyme's 2011 expected earnings, based on the earlier forecast. "If he thinks 19 times is a fair price, it will have to be 19 times what the real number is" likely going to be next year.

So far, no rival bidders have emerged to challenge Sanofi in its pursuit of Genzyme. Earlier this year, Pfizer Inc., GlaxoSmithKline PLC and Johnson & Johnson made casual, preliminary approaches to remind Genzyme they could be interested if the company decided to sell itself. Time for Henri to go to his Rolodex.