Genzyme Declines Sanofi’s Acquisition Bid of $18.5 billion

On August 30, Genzyme Corp. declined to go ahead with the Sanofi-Aventis AG’s acquisition bid of $18.5 billion or $69-a-share, as the Company undervalued the worth of the former.

In a letter to Sanofi, Henri A. Termeer, Genzyme’s Chief Executive said, “The Genzyme board is not prepared to engage in merger negotiations with Sanofi based upon an opportunistic proposal with an unrealistic starting price that dramatically undervalues our company’’.

As per some investors, the alternatives, now lying with the Sanofi are increasing the price of the bid to $80 per share, exercising a hostile bid or taking a step back from the proposal.

Sanofi’s Chief Executive, Christopher A. Viehbacher termed the letter a relatively unsurprising response, in a conference call with analysts and expressed not liking the comments made by Genzyme’s board calling their offer as unrealistic. Though, he indicated that Sanofi could reconsider the offer’s price, provided if Genzyme is candid for talks.

The market analysts are speculating over the Genzyme and are trying to make out, if the Company wants to perform independently or expects potential bidders to come with the proposal. The other thing, which the Company is expected to do, is to win the confidence of its big investors, after struggling out of the production problems.

The $80 per share to purchase Genzyme is being considered worth by many of the investors of the Company.