* Genzyme says Sanofi proposed $69-$80/share price range
* Sanofi denies a price range was discussed between CEOs
* Sanofi says to cut 25 pct of U.S. pharmaceutical jobs
* Sanofi shares down slightly, Genzyme closes up
(Adds Genzyme comment, closing share price)
By Dominique Vidalon and Bill Berkrot
PARIS/NEW YORK, Oct 8 Sanofi-Aventis (SASY.PA)
denied that it had dangled a higher price for Genzyme Corp
GENZ.O before going hostile with its $18.5 billion bid,
deepening the animosity in their transatlantic takeover fight.
Genzyme said on Thursday that Sanofi Chief Executive Chris
Viehbacher had proposed a deal price range of $69 per share to
$80 per share at a meeting with Genzyme CEO Henri Termeer in
late September, two weeks before it went hostile with a
"We strongly disagree with Genzyme's characterization of
the Sept. 20 meeting," Sanofi chief spokesman Jean-Marc Podvin
said on Friday in response. "We offered no price range and
Genzyme continued to refuse to engage with us on discussions on
Genzyme, however, said it accurately reported the facts in
its regulatory filing. "We are unequivocally standing by our
characterization of the meeting on Sept 20," Genzyme spokesman
John Lacey said through an email.
For latest Breakingviews article: [ID:nLDE6970HU]
For more Reuters stories on the bid: [ID:nLDE68S1PP]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> France's Sanofi aims to acquire U.S.-based Genzyme's
lucrative portfolio of drugs for rare diseases as it prepares
for the loss of patent protection on top-selling drugs, such as
its biggest product, the blood clot preventer Plavix.
Underscoring that harsh reality, Sanofi said on Friday it
would cut 25 percent of its U.S. pharmaceutical jobs.
[ID:nN08221827] Most of the 1,700 positions from the unit would
be cut from its U.S. sales force, Sanofi said.
Since news of Sanofi's interest in Genzyme emerged, the
rhetoric between Termeer and Viehbacher has ratcheted up. The
exchanges could affect how quickly any deal would be resolved,
with a hostile campaign likely to last well into next year.
Analysts said the dispute highlights expectations that
Sanofi will have to raise its offer. Genzyme shares closed 0.5
percent higher at $72.75 on the Nasdaq on Friday, after hitting
a year high of $72.98 earlier. Sanofi closed down 0.17 percent
at 48.96 euros.
A source familiar with the discussions said Sanofi could
sit back and wait while its offer ticks toward a Dec. 10 expiry
date, hoping Genzyme or its shareholders lose their nerve and
The source added that a deal might not be struck until
Termeer resigned or was removed by his board.
"This could end up in a proxy fight again for Genzyme," the
source said, referring to the company's battle with activist
investor Carl Icahn earlier this year. Genzyme settled with
Icahn and named two of his representatives to its board.
Termeer, a founder of Genzyme and deeply invested in the
company and its legacy, appears ready for a long fight.
Viehbacher, who cut his teeth on a number of smaller deals
both at Sanofi and as head of North American operations at
GlaxoSmithKline Plc (GSK.L), seems prepared to shape his tenure
around an ability to get the deal done on his terms.
The latest twist centers on their meeting on Sept. 20.
According to a Genzyme securities filing, Viehbacher
proposed that the two discuss a deal price range of $69 to $80
per share. Viehbacher, according to Genzyme, said the price
range was "manageable" but doubted he could reach the higher
end based on his current understanding of the U.S. company's
Genzyme, which made the disclosure as it repeated its
rejection of Sanofi's offer, said Termeer would not discuss
that range or suggest an alternate price. Sanofi's Podvin
dismissed the account of the conversation.
"At that meeting we made a variety of efforts to move the
process forwards, including discussing the merits of our $69
per share offer, and we tried to understand if media reports
about Genzyme's price expectations were accurate," he said.
Many analysts believe an all-cash deal -- funded by
plentiful cheap loans -- would enhance Sanofi earnings
comfortably even at the mid-$70s per share level. A Reuters
poll in August found the average price forecast by analysts was
$77.90 per share. [ID:nLDE6730A3]
"I think the offer will be raised, but I am not sure that
it will go as high as $80," said analyst Jean-Jacques Le Fur at
Oddo Securities in Paris.
"According to my calculations, to create value the offer
should not go above $75. Sanofi is in a position of strength
because it is probably the lone suitor, and the board and
management of Sanofi don't seem to want to go too high."
For Genzyme, however, such a deal would have it selling out
below a peak above $83 reached in 2008, before the company ran
into serious manufacturing problems that hit the stock.
Viehbacher has said that Genzyme might be worth more than
$69 a share, but that he would need more information on its
recovery from the manufacturing crisis and the sales potential
of a promising experimental multiple sclerosis drug, Campath.
Analysts' estimates for its ultimate potential have ranged
from $500 million to $1.8 billion a year.
If Genzyme's share price started to fall to $69 or below,
Sanofi's offer could begin to look good and shareholders might
force management to the table.
Genzyme said on Thursday it would evaluate alternatives for
its assets, including reaching out to other companies to prove
it is worth more to investors. But no prospective white knights
have emerged thus far.
(Additional reporting by Nina Sovich and Noelle Mennella in
Paris and Ben Hirschler in London; Writing by Tim Hepher;
Editing by Michele Gershberg, Gerald E. McCormick and Matthew