Sanofi's CEO Chris Viehbacher is ramping up the pressure on Henri Termeer and the Genzyme board by making a tender offer directly to its shareholders. Most analysts believe the majority of these shareholders will not sell out at the $69/share that has been offered to date, but will support Viehbacher in pressuring Genzyme to the negotiating table. This is especially tue as the stock currently is above $69/share but would be expected to plunge in the $50's if Sanofi takes a walk from the acquisition attempt.
For its part, Sanofi needs Genzyme to come to the bargaining table and begin sharing insider information to allow more appropriate due diligence. Two key issues that need to have more light shed upon them: 1) Amount of time/money/effort it will take to get the Allston facility out from under the $175 M FDA consent decree, 2) Realistic expectations for Campath's peformance as a treatment for MS and its potential commercial value. Is it the $700 M/yr that several analysts have cited or a much higher figure preferred by Genzyme management.
After getting to the table and gaining this key information, Sanofi will be in a position to make a higher offer as appropriate -- in low $70's per share more than likely -- to induce shareholders to sell. By all accounts, Sanofi has been lining up its financing for months to allow this. The more aggressive posture not only puts pressure on Genzyme but may also serve to keep any white knights from entering the picture at this late stage -- although Genzyme does appear to be a damsel in distress. See Seeking Alpha.
Posted by Bruce Lehr October 5th 2010.