Fortune opines that Genzyme and other observers should not hold their breaths for a private equity white knight to come riding to its rescue versus the Sanofi bid. Primarily, its a matter of price - at $69-$71/share - a private firm would need to have at least $7.5 billion if leveraged at 60%. That seems too rich in this environment.
Sanofi on the other hand has been lining up its financing for months and that would not seem to be an issue. Plus a buyer operating as an ongoing concern in the pharma business, has 100's of millions of additional svings that it can find post-acquisition via rationalization, consolidation and through the dreaded synergies. These would not be readily available to the PE group.
Fortune says that its research shows that there have been only 3 deals involving a PE takeover of a pharma company that exceeded $1 B in value. That's a far cry from the $18-20 B needed to capture Genzyme. PE is unhorsed as a white knight.
Posted by Bruce Lehr October 6th 2010.