An analyst predicted it, and now it's happening. Sanofi-Aventis (NYSE: SNY) and Genzyme (NASDAQ: GENZ) are playing chicken--deal talks between the two companies are hung up on price, sources tell the Wall Street Journal, with Sanofi reluctant to boost its buyout offer much, and Genzyme intent on getting more.
So, they haven't settled on a "threshold price"--an initial negotiated bid that could change, depending on what Sanofi finds during due diligence. Last week, Sanofi reportedly was even considering taking a hostile bid directly to shareholders, but ended up deciding to stick with friendly negotiations, at least for now, the WSJ reports.
Apparently, some of Genzyme's leadership is second-guessing a deal, too. They're wondering whether they should just sit tight and wait for Genzyme's manufacturing turnaround to wrap up, and for its experimental multiple sclerosis drug to get to market. One of those reluctant to sell is CEO Henri Termeer (photo), sources tell the Journal.
But a higher bid than Sanofi's current $69 per share, or $18.4 billion, could make a big difference. Indeed, some of the directors think Sanofi's current bid is too low to be taken seriously. The WSJ says a $75 per share offer could induce the company to open its books for Sanofi's perusal, but it remains to be seen whether the French drugmaker will go that high.
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