UPDATE 1-France’s Stallergenes weighs offer, shares suspended

* Share suspension linked to Ares launching offer for rest

* Stallergenes sees bid in shareholders, workers interest

* But says may not reflect full potential value

(Adds detail, analyst)

By Caroline Jacobs

PARIS, Dec 16 (BestGrowthStock) – French allergy medicine maker
Stallergenes (GENP.PA: ) sees a bid from health investment fund
Ares Life Sciences as in shareholders’ and workers’ interests
yet acknowledged it may not reflect its full potential value.

Stallergenes, whose shares were suspended on Thursday,
issued the opinion after Ares launched a public tender offer at
59 euros per share for the 54.1 percent of the company’s shares
it does not already own.

Ares had earlier purchased 45.9 percent stake from French
investment group Wendel (MWDP.P: ) at the same price.
[ID:nLDE6AG06R]

But shares in Stallergenes, which had sales of 193 million
euros last year, have been trading above 59 euros since
mid-September. At their peak in October this year the shares hit
65.85 euros, well above a trough of 49.56 euros hit in July.

The stock has gained nearly 2 percent this year.

In its response to the Ares offer, the Stallergene board
said: “The offer is in the interest of the company, its
shareholders and workers, and it offers satisfactory opportunity
to sell for holders wish to gain liquidity immediately … but
the price of the offer may not fully reflect the long-term
valuation potential of Stallergenes.”

PRICE TARGET

Chairman and Chief Executive Albert Saporta in a statement
last month welcomed Ares as Stallergenes’s new shareholder,
saying its expertise would benefit the company and its
expansion.

Some analysts disagreed.

“We advise against tendering to the offer,” CM-CIC
Securities analyst Arsene Guekam wrote in a research note. He
has a share price target of 78 euros on Stallergenes.

An independent expert brought in by the board to evaluate
the Ares offer said it was difficult to assess Ares’s offer but
concluded it was a fair price.

Ledouble, appointed by the Stallergenes board, wrote that
Stallergenes’s plans in the United States, the world’s biggest
drug market, was only in its early stages and it had not been in
a position to assess its potential value.

Stallergenes is looking for a partner to market its Oralair
anti-allergy pill, which it expects to submit for U.S. marketing
approval early next year after completing a final-stage trial in
April.

Ledouble also pointed out that market expectations in terms
of target price for Stallergenes shares were for more than 70
euros.

Nevertheless, it concluded: “Among the circumstances listed
above, we note that the 59 euro bid price is within a range that
includes the management’s estimate of the U.S. project and
matches the price of the takeover transaction.”

France’s stock market regulator, the AMF, is expected to
publish its opinion on the Ares offer this afternoon. Shares are
expected to resume trading on Friday.
(Editing by Leila Abboud and David Holmes)

UPDATE 1-France’s Stallergenes weighs offer, shares suspended