Sanofi-Aventis hasn't been so lucky in its bid to buy the Czech generics maker Zentiva. The object of Sanofi's desire rebuffed the $2 billion takeover offer, as its board of directors told shareholders that the price doesn't fairly reflect the company's "underlying value" and "future prospects." Zentiva enumerates its reasoning--arrived at with the help of Merrill Lynch, which it hired to evaluate the offer--in a document available at the link below. Sanofi, as you know, already owns a 24.9 percent interest in the company, which it bought in 2006 for $523.9 million from Warburg Pincus.
You'll recall that last month a Czech financial company, PPF Group, offered 950 koruna per share for Zentiva, and the company promptly announced its contempt for that price. Sanofi then offered 1,050 koruna; we now know what Zentiva management thinks of that. And here's where things get really interesting: Will PPF come back with a higher offer? And if so, will Sanofi counter? Zentiva management seems to think that a bidding war is in order; we'll see whether its suitors do, too.