Missing “Ingredients” for Genzyme Corp and Sanofi-Aventis?
Despite the declaration that the “ingredients are there” for a deal between Genzyme Corp and Sanofi-Aventis but at a higher price, consensus among investors seem to be that Sanofi won’t be raising their bid of $69/share. Genzyme board member and activist investor Ralph Whitworth said on Tuesdaythat while the price needs to go higher, “we would not stand in the way of a deal at a fair price.”
“These sentiments are a foregone conclusion that $69 won’t get it done,” says Scott Nations, Chief Investment Officer of NationsShares.
Nations says there is “not that much activity” in the options markets for contracts of Genzyme, because shares are “already at $71 (so) the $69 bid is a non-starter.”
Whitworth said that a deal should happen, if management from both companies work at it. “If people look at it and say, ‘Lets make something work for everybody.’ Clear that means higher than 69,” said Whitworth in an interview on CNBC’s Strategy Session.
The tender offer of $69/share by Sanofi-Aventis expires on December 10th and CNBC has previously reported that Sanofi is highly unlikely to raise that bid, according to people familiar with the situation.
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