Thursday, October 07, 2010

Genzyme to Sanofi: No Thank You

Wow, that was a quick… Today, Genzyme (Ticker: GENZ) officially rejected Sanofi-Aventis (Ticker: SNY) tender offer. Companies usually wait until the final day to issue a press release regarding their decision on a tender offer (a company has 10 business days to respond to a tender offer). Genzyme is making a statement that it’s not even worth their time to evaluate such a low ball offer.

The Wall Street Journal is also reporting that Genzyme has authorized a review of strategic alternatives. In English, this means that the company is basically putting itself up for sale and the highest bidder wins. It’s not a surprise that no one has approached Genzyme yet because they have told their bankers to hold off in seeking out buyers. Now, they have given their bankers the green light to seek higher bids. This will force Sanofi-Aventis to move quickly with a higher bid or risk losing Genzyme. It’s obvious that Whitworth and Icahn pushed for this. The board had no choice, but to make this move after Sanofi-Aventis went hostile.


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