Sanofi-Aventis has thwarted those optimistic sources expecting a deal announcement Monday morning. The French drugmaker's review of Genzyme's books and manufacturing operations is taking a bit longer than expected, people close to the deal now say. Cash price agreed, follow-up payments agreed, but all subject to Sanofi's due diligence, they say.
In fact, the Boston Globe reports, the companies' boards were scheduled to meet over the weekend to approve a merger, but that plan was scrapped to give Sanofi more time to comb through Genzyme's records. Of particular concern, the Globe's sources say, is Genzyme's ongoing recovery from a plague of manufacturing problems over the past couple of years.
Sources are telling the Wall Street Journal that the tentative deal includes $74 per share in cash up front, with a contingent value right initially worth $2. That CVR could end up paying a maximum of $5 to $6 per share, depending upon performance targets for the experimental multiple sclerosis drug Lemtrada.
So, in cash, we're looking at $19.2 billion or so; that's less than Viehbacher's $20 billion deal cap, but hundreds of millions more than the initial bid of $69 per share. And then there are the CVR payments down the road, which, if they end up coming through, would bring the deal up to as much as $80 per share--just about the number Genzyme shareholders were tossing around early on.