Zentiva tells shareholders to reject Sanofi bid

AMSTERDAM (Reuters) - Sanofi-Aventis's (SASY.PA) offer for Czech generic drug maker Zentiva ZNTVsp.PR, which values it at 40 billion crowns ($2.34 billion), does not reflect the company's worth and should not be accepted, the company's chief executive told shareholders on Wednesday.

Noting that the offer of 1,050 Czech crowns per share was below the company's current share price of 1,066 crowns, Jiri Michal said the company was set to increase sales by 20 percent this year, and that the offer's valuation was not in line with comparable generic drugmakers.

"There is still big potential," Michal told Reuters on the sidelines of the special shareholder meeting in Amsterdam, adding that Zentiva was positioned in Central and Eastern Europe to market its products to 440 million people.

"The Sanofi offer fails to reflect the unique strategic position that we have built in the CEE region in the sector of generics over the last three years," Zentiva said in a statement released after the meeting.

Sanofi disagreed.

"We consider that the offer price reflects the fair value of the company and is in the best interest of its shareholders," Sanofi spokesman Jean-Marc Podvin said.

Zentiva, reiterating a statement from July, said by accepting the offer shareholders could lose an opportunity to participate, "in the benefits of a potential synergistic transaction" or to receive a premium from a potential sale of a controlling stake in the company.

Its chief financial officer told Reuters in Prague that Zentiva is seeking a partner to boost its presence in target markets and could acquire a smaller peer or be taken over by a bigger peer in the next two to three years.

Zentiva, which has an Amsterdam listing, called the meeting to discuss the bid but no vote was scheduled. The offer from Sanofi, which already has a 24.9 percent stake, values the shares it does not own at 30 billion crowns.

Czech financial group PPF, which owns 19.2 percent of Zentiva with Italian insurer Generali (GASI.MI), had offered 950 crowns per share for the company but officially withdrew its bid on July 30. No other offers have since been made.

If Sanofi wins the bid, which runs through September 19, it would give the world's third-largest drug maker by sales a bigger foothold in the fast-growing central and eastern European markets.

It would also take it deeper into generic drug production, an area which until recently was generally shunned by large pharmaceutical groups.

Zentiva's shares closed 0.47 percent higher at 1,073 crowns on Wednesday, outperforming Prague's main PX .PX index which was down 1.3 percent.

(Additional reporting by Jana Mlcochova in Prague and Caroline Jacobs in Paris; Editing by Quentin Bryar, Greg Mahlich)