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S-A appeals to Genzyme on takeover bid

Chris Viehbacher, CEO of sanofi-aventis, has appealed for takeover target Genzyme not to adopt ‘defensive measures’ to block its bid in a letter to the company's CEO Henri Termeer

Sanofi-aventis (S-A) chief executive officer Chris Viehbacher has sent a letter to Genzyme chief executive officer Henri Termeer, in which the S-A head has requested that its takeover target not adopt ‘defensive measures’ in a bid to derail the hostile takeover.

The letter states that, although S-A has been encouraged that the US biotech is exploring alternatives to the takeover, Genzyme has not contacted S-A or included it in the process to date. The French company has requested further meetings to discuss the possible takeover.

On October 7, Genzyme floated the possibility of staggering appointments to its board, which would prevent shareholders from removing all board members in one sitting. Viehbacher warned Genzyme against approving such poison pill provisions or invoking anti-takeover laws, which it called inappropriate. The biotech should allow its shareholders to make a free decision about whether to reject or accept the offer, Viehbacher noted.

S-A's preferred option remains negotiating an acquisition deal directly with Genzyme, the company has claimed.

In his response letter to Viehbacher, Termeer stated that the board is committed to taking all appropriate actions in the best interests of Genzyme and its shareholders, and repeated the company’s earlier comments that S-A's bid is opportunistic and inadequate. Based on earnings forecasts for next year, Genzyme believes the company to be worth as much as $89 per share, a figure S-A has called totally unrealistic’.

Informal takeover talks between the two companies began in July, with S-A making a non-binding proposal of $18.5bn at the end of August. The takeover attempt got hostile in early October, when S-A took its $69-per-share bid directly to Genzyme's shareholders.

"[In a meeting with Genzyme shareholders] it was clear [that they] are supportive of our initiative and, like us, are frustrated with your refusal to have meaningful discussions with us regarding our proposal," Chris Viehbacher wrote to Henri Termeer at the time. However, in the latest developments, Genzyme has said that its shareholders are in agreement that the offer price is inadequate.

Further details can be found in S-A's complete response letter (pdf) and Genzyme's response.

9th November 2010

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