4 Min Read
(Repeats to add additional reporters)
* Says no rush on both sides to get deal done
* Hopeful of meeting Genzyme management for first time
(Adds more CEO comments, background)
By Caroline Jacobs
PARIS, Sept 15 (Reuters) - Sanofi-Aventis (SASY.PA) sees a reasonable chance of buying U.S. biotech Genzyme GENZ.O at a fair price, but expects it will take some time to agree a deal that would further diversify the French drugmaker and strengthen its U.S. foothold.
Chief Executive Chris Viehbacher on Wednesday reiterated Sanofi would not be rushed to buy Genzyme, a specialist in rare diseases, after it rejected Sanofi's $18.5 billion non-binding cash offer at the end of August.
"I think there's a reasonable shot at a deal getting done at a reasonable price, but it's not going to be a quick process," Viehbacher said in a webcast presentation at a Bank of America-Merrill Lynch Global Healthcare Conference in London.
Genzyme CEO founder, Henri Termeer, late last month told Reuters there was a "high probability" of a deal getting done but demanded, without wanting to specify, a reasonable starting point for negotiations to begin.
Viehbacher had met about 50 percent of Genzyme shareholders in the United States last week and has yet to meet Genzyme management, whom he has accused of forming a "brick wall", to discuss Sanofi's offer of $69 a share.
"It was easier to see Genzyme shareholders than management, but that will hopefully change very shortly," he said.
Viehbacher did not say at what price the Genzyme shareholders he had met would consider selling their holdings in the company.
Several of Sanofi's key drugs are facing generic competition which along with future patent expiries will shave about a third of its 2008 sales until 2013.
Buying Genzyme would help Sanofi bridge that gap and add rare diseases as a sixth growth platform next to others like emerging markets, vaccines and diabetes.
Genzyme shares took a hit earlier this year due to manufacturing problems following plant contamination, but have risen since speculation surfaced in late July of a Sanofi offer. The stock hit a year's high last week at $71.
"I don't think they (Genzyme) are in a hurry and neither are we in hurry," Viehbacher said. "I don't see anybody else coming into the deal, so that's not pushing anybody in terms of speed," referring to the possibility of a rival bid for Genzyme.
Sources have said Cambridge, Massachusetts-based Genzyme is prepared to give Sanofi access to its books if it raises its offer to at least $75 a share.
But Sanofi, consistently repeating it will remain disciplined on price, hasn't budged and Viehbacher signalled that conducting due diligence would probably not tell Sanofi much new on top of what it already knows.
"I don't think we'd find anything unexpected," he said.
Genzyme, under close scrutiny of the U.S. health regulator, has had to disclose detailed information about its contamination problems and the crisis forced Genzyme to name three activist investors to its board: two allies of Carl Icahn and Ralph Whitworth of Relational Investors.
The viral contamination at its manufacturing plant in Boston meant Genzyme had to temporarily close it last year, leading to shortages of two of its biggest selling products Cerezyme, which treats Gaucher disease, and Fabrazyme, its Fabry disease drug.
Since Sanofi made its intentions on Genzyme public, the company announced the sale of its genetic testing business -- one of three it is looking to sell -- and has begun laying off staff as part of a restructuring announced in May to cut costs. (Additional reporting by Quentin Webb and Paul Sandle in London, Editing by David Holmes, Mike Nesbit)