There's a new plot twist in the trans-Atlantic takeover battle between French pharmaceutical giant Sanofi-Aventis (SNY) and Massachusetts-based rare disease drugmaker Genzyme (GENZ). According to a regulatory filing made by Genzyme on Thursday, Sanofi, which went hostile Monday with a $69 a share bid for the U.S. company, may be willing to bid higher, much higher -- a claim the French company disputes.
Paris-based Sanofi's CEO Chris Viehbacher provided a possible price range of $69 to $80 a share when he met the Genzyme's CEO Henri Termeer at a Sept. 20 meeting. Termeer declined to agree to the range at the meeting. Then, in a weird twist, Sanofi denied that it offered Genzyme a price range at the meeting, Bloomberg reported.
According to the filing, Viehbacher further said in the meeting the price range he was proposing was "manageable but that, based on his current understanding, he could not get to $80 a share," Bloomberg reported.
Termeer "declined to agree" to the range and "reiterated the company board's unanimous view that $69 per share was an inappropriate price at which to commence negotiations."
The Genzyme board urged shareholders to reject Sanofi's existing offer of $18.5 billion, or $69 a share. Moreover, the board cleared its advisers to contact third parties to "evaluate alternatives for the company and its assets," the filing said.
Genzyme says it will introduce three medicines by the end of 2013 that aren't valued by Sanofi's offer, according to the filing. Viehbacher had previously said he was willing to increase the offer if Genzyme provides more details on the company. Sanofi-Aventis is facing a major patent cliff: Five of its eight best-selling drugs will lose patent protection and face generic competition by 2012. Acquiring Genzyme could help it offset lost sales and boost its weak biotech division.
According to Bloomberg, analyst Michael Yee of RBC Capital Markets believes large drugmakers led by Pfizer (PFE) and Johnson & Johnson (JNJ) may emerge as a rival bidders. A Reuters poll of analysts in August found the average forecast price for a deal was $77.90 a share.
Genzyme's stock had dropped as much as 43% from a 2008 high of $83.25 after sales and profit slumped following contamination at a Boston plant that caused drug shortages, but the share price has rebounded significantly since Sanofi's interest in the company was made public. In after-hours trading following Thursday's filing, it climbed another 1%.