Sanofi used its earnings call as a forum to restate that it has no interest at this time in upping its $69 per share bid for Genzyme. They say they need more information from a due diligence process to justify and bid change. Genzyme still refuses to engage in such talks at a bid price of $69 per share - rumors indicate that it will take at least $75 per share to get them to engage in discussions.
Sanofi has now suggested that a small working group be formed to look at potential earnings of Genzyme's lead candidate MS drug, Campath. This could be viewed as a modified due diligence request as projected Campath revenues are a large basis for the rosy modified projections that Genzyme showed at its conference call last week. In it, Genzyme revised its 2011 EPS figure to $4.30 to $4.60 per share up by 20% over consensus analysts estimates. See WSJ Health Blog.
For those further interested in reading about "inside the game" strategies that could be employed by both sides, I recommend checking out the WSJ Deals blog story. It would appear that December 10th looms as a big date on the calendar. Genzyme could try to bring in a white knight candidate at the 11th hour to confound the negotiations and make it even more expensive for Sanofi to remove such a bidder. Or alternatively, if such a bidder is not there, Sanofi can threaten to walk from negotiations at that point and we can all watch where the stock goes then. Sanofi could also try a proxy fight early in the year at Genzyme's shareholder meeting. High stakes poker prevails.
Posted by Bruce Lehr October 29th 2010.