Genzyme Corp confirmed that it has received an unsolicited, non-binding proposal from Sanofi-Aventis to acquire all the outstanding shares of Genzyme for $69 per share in cash. The Genzyme board of directors met last night, unanimously affirmed its previous rejection of Sanofi’s proposal, and instructed the company to send Sanofi the following response letter:
Dear Mr. Viehbacher:
The Genzyme board is now in receipt of your second unsolicited letter proposing to acquire the company for $69 per share in cash. This letter, received yesterday, is identical to last month’s offer. It provides no new information and no improvement in price, and therefore fails to establish a basis for engagement by the Genzyme board.
This should come as no surprise to Sanofi. On August 11, 2010, Genzyme responded to your first letter dated July 29, 2010. In our response, we stated that, “without exception, each member of the Genzyme board believes this is not the right time to sell the company, because your opportunistic takeover proposal does not begin to recognize the significant progress underway to rectify our manufacturing challenges or the potential for our new-product pipeline.” Our board met last evening in response to your second letter and unanimously confirmed those views.
As you are well aware, our bankers met with your financial advisors on August 24, 2010, and provided very useful, non-public information regarding progress the company has made to meaningfully improve its manufacturing capacity, the tremendous future upside of our multiple sclerosis drug alemtuzumab, and our outlook for significant cost reductions that will further drive our earnings growth. Moreover, last week’s public announcement that we have begun to increase the supply of Cerezyme for patients with Gaucher disease to near-normal levels, and that supplies of Fabrazyme for patients with Fabry disease will increase beginning in the fourth quarter, further illustrates the progress we are making as well as the opportunistic nature of your proposal.
Notwithstanding this information and assistance, you have not increased your price above $69 per share. You and your advisors claim you are willing to pay more but that you are unwilling to “bid against yourself.” The Genzyme board is not prepared to engage in merger negotiations with Sanofi based upon an opportunistic proposal with an unrealistic starting price that dramatically undervalues our company.
As you know, the Genzyme board includes representatives of some of our major shareholders. Our board has worked actively to understand the true value of our company and is unanimous and resolute in its commitment to maximize Genzyme’s future value for all of our shareholders.
Henri A. Termeer
Chairman and Chief Executive Officer
Genzyme noted that there is no need for company shareholders to take any action at this time. Genzyme’s financial advisors are Credit Suisse Securities (USA) LLC and Goldman, Sachs & Co., and its legal advisor is Ropes & Gray LLP.