Ronald Barush in his WSJ blog outlines his take on possible endgame scenorios for the Sanofi-Genzyme acquisition dance that's been going on since the summer. He articulated his comments after Sanofi went public with a tender offer this week.
According to his analysis, Sanofi will eventually make a take-it-or-leave it offer to Genzyme management (and effectively the shareholders). He predicts Genzyme will flat out reject the offer - especially if it is in range of the $69/share proffered by Sanofi up to now. Then the fun begins.
- Poison Pill will be adopted by Genzyme which will allow its board to take control of timing of takeover. Sanofi can't make its move until Pill is redeemed
- Board Divisions (internal positioning or infighting) will ensue. The Icahn side of board won't be fixated on fighting off the acquisition but rather will want to extract the highest price.
- Proxy Fight (Oh boy!, Fight! fight!) follows. Sanofi tries to replace board at Genzyme annual meeting and inactivates the Pill. Could drag on to June under this scenario.
The easiest way for Sanofi to end the game is to raise its offer and make a deal Genzyme board can live with. Genzyme of course is now scurrying off to find a White Knight to shift the dynamics and ratchet up the bid.
Posted by Bruce Lehr October 8th 2010.