Sanofi and Genzyme Still at Odds Over Acquisition

Sanofi-aventis (Paris) has asked Genzyme (Cambridge, MA) to stand aside and let the shareholders decide on whether an acquisition should take place. In the latest update in the ongoing sanofi-aventis/Genzyme acquisition battle, the CEOs of both companies have exchanged harsh letters.

Genzyme has several defenses in place, including a shareholder-rights plan or “poison pill,” which may prevent a hostile takeover. According to sanofi-aventis CEO, Christopher Viehbacher, however, this is unfair for shareholders.

“We believe it would be inappropriate for the Board to take these defensive actions,” said Viehbacher in a letter. “If we are unable to have a direct dialogue with you, in all fairness you should allow your shareholders the opportunity to decide for themselves whether or not to accept our proposal.”

Additionally, Genzyme is wielding the threat of the Massachusetts anti-takeover status, which would prevent the acquisition from taking place without Board approval, regardless of shareholders’ opinion, and has indicated that the board can extend the election terms of two-thirds of its current directors to an additional one to three years.

“Your shareholders should know with certainty that you will not interfere with their right to benefit from our offer,” said Viehbacher in the letter. “Therefore, we ask that you take action to make the Massachusetts anti-takeover status inapplicable to our offer and confirm that Genzyme’s 2011 annual meeting of shareholders, including the election of all directors, will be held on schedule.”

Viehbacher also requested a meeting with Genzyme to discuss the proposed acquisition, but in a firm response posted on the company’s website, Genzyme CEO Henri Termeer, explained that the current $69 per share offer is not an appropriate starting point for discussions. He highlighted the reports Genzyme has released about its near-term plans and future prospects, as well as the results of an independent third-party study of the significant revenue potential of its multiple sclerosis candidate alemtuzumab.

“Sanofi-aventis, for its own purposes, has chosen to dismiss or ignore this information and stick to its opportunistic and inadeuqate $69.00 per share offer, even as analysts have adjusted their target to reflect the new information,” said Termeer. He also added that Genzyme continues to have the support of its shareholders.

He makes no mention of taking the actions Viehbacher requested, although he did explain that the Board is open to discussions with sanofi when an appropriate offer is made.

The current tender offer for all the outstanding shares of Genzyme will expire on Dec. 10, 2010.