Sanofi's Hostile Bid for Genzyme May Sit For Some Time

If anyone needed reminding, the last couple of weeks have made it clear once again how hard it can be to pull off a hostile deal.

Source: Genzyme

After months of futile attempts, Couche Tardefinally threw in the towel on its attempt to buy Caseys General Stores and last week the BHP Billiton giant hostile bid for Potash was dealt a death blowby Canadian regulators.

One deal still sitting there: Sanofi-Aventis' $69 hostile bid for Genzyme. And from the appearance of the latest letters exchanged here, it may sit for some time.

Sanofi, other than recently adding Morgan Stanley to its roster of advisors, is in the challenging position of having virtually no near-term ability to pressure Genzyme, other than raising its bid, which appears to be the one thing it won’t do.

It’s got a tender offer out there that it can’t close and that may not be tendered into given the price of its current offer. That tender, which will likely be extended, should probably just be scrapped. Meanwhile, the date to file a slate of candidates for Genzyme's board is still three months away.

One thing in Sanofi’s favor: while it may worry that Genzyme will stagger its board or install a pill, neither seems likely given that it’s board includes two of the biggest activist money managers out there: Carl Icahn and Relational Investors.

And while the passage of months could change the landscape, right now I’ve heard of no other bidders. While Japan’s Takeda Pharmaceutical Companydid take a quick look, that company is not moving forward, according to people familiar with its strategy.



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