* Sanofi CFO sees merit, in theory, of structured M&A deal
* “Contingent value right” helps bridge price disagreements
* Takeover target Genzyme also open to CVR in principle
(Adds detail, background)
By Ben Hirschler
LONDON, Dec 1 (Reuters) - Sanofi-Aventis’s finance chief (SASY.PA) said staggered takeover payments to bridge value disputes were interesting “in principle”, after suggestions that such a set-up could help win over reluctant bid target Genzyme.
Genzyme GENZ.O, the U.S. rare-disease specialist, is resisting a hostile $18.5 billion takeover bid from Sanofi as too low, and a structure known as a contingent value right (CVR) has been mooted as a way to break the deadlock.
The French drugmaker’s initial tender offer for Genzyme closes on Dec. 10.
“A contingent value right would be a way to bridge a gap when different parties have different ideas on valuations,” Sanofi Chief Financial Officer Jerome Contamine told Reuters on Wednesday.
“It’s an interesting idea in principle,” Contamine said, speaking on the sidelines of the FT Global Pharmaceutical and Biotechnology Conference.
He declined to say if Sanofi had discussed a CVR with Genzyme, and when asked about the possible outcomes of the tender offer, would only say: “We’ll see”.
Sanofi’s tender offer is at $69 a share, below the current market price of around $71.50.
Last week the Wall Street Journal said Genzyme was exploring a CVR deal structure and quoted people familiar with the matter saying Sanofi had indicated it was open to such a framework.
Chief Executive Henri Termeer later told a French newspaper Genzyme was considering a CVR — which could allow Sanofi to pay a lower price for Genzyme now and more later if key drug Campath hits future targets.
Genzyme has defended its peak sales forecast for Campath, an experimental multiple sclerosis drug, of up to $3.5 billion a year after Sanofi called the estimate “unrealistic. (Additional reporting by Quentin Webb; Editing by Louise Heavens)