UPDATE 3-Sanofi asks Genzyme to let investors decide on bid

* Sanofi asks Genzyme not to take defensive measures

* Says has not been contacted by Genzyme or its advisers

* Sanofi still interested in working with Genzyme on deal

* Sanofi shares up 0.1 pct, Genzyme down 0.9 pct
(Adds Genzyme response)

By Helen Massy-Beresford

PARIS, Nov 8 (BestGrowthStock) – French drugmaker Sanofi-Aventis
(SASY.PA: ) said it has called on bid target Genzyme Corp
(GENZ.O: ) not to use defensive tactics to block a takeover of
the U.S. biotech but to let shareholders decide on its $18.5
billion offer.

Sanofi Chief Executive Chris Viehbacher said in a letter to
Genzyme CEO Henri Termeer published on Monday that the board
should not stand in the way of shareholder choice if it was not
prepared to enter direct talks with the French group.

“You have publicly disclosed that Genzyme’s board has
authorised management and the company’s advisors to ‘probe and
evaluate alternatives’ for Genzyme and its assets, including
contacting third parties,” Viehbacher said.

“We were encouraged to hear this, but to date, we have not
been contacted or included in this process,” Viehbacher added
in the letter, which was dated Nov. 8. (See TAKE A LOOK
[ID:nLDE69R0ZX] )

Viehbacher said certain comments made by Genzyme management
seemed to be inconsistent with its publicly stated aim of
maximising shareholder returns and listening to shareholders.

Sanofi said the comments referred to three possible courses
of action for Genzyme: extending the terms of some of its
directors, using Massachusetts anti-takeover statutes to block
a deal or adopting a “poison pill” to stop Sanofi taking
control.

“We believe it would be inappropriate for the board to take
these defensive actions,” Viehbacher said.

“If we are unable to have a direct dialogue with you, in
all fairness you should allow your shareholders the opportunity
to decide for themselves whether or not to accept our
proposal.”

Genzyme spokesman John Lacey said the company had received
the letter and was reviewing it. He declined to comment
further.

Sanofi has stuck to its bid for Genzyme after the U.S.
company held a series of meetings to demonstrate it was worth
more than the $69 per share Sanofi has offered, citing sales of
$3 billion for its experimental multiple sclerosis drug.
[ID:nN22162250]

Genzyme executives have said their earnings forecast for
next year implied a price as high as $89 per share, based on
the multiple underlying Sanofi’s hostile $69 per share offer.
Sanofi has called $89 per share “totally unrealistic.”

“This is still a game of cat and mouse. The group is
putting pressure on shareholders and indirectly on the board by
making this public. He who dares wins,” said one analyst who
asked not to be named.

Sanofi said in a statement accompanying the letter that it
remained interested in working with Genzyme on a constructive
basis and was committed to a mutually agreeable transaction.

“Let’s be frank, what is the issue here, it’s pricing,”
Kris Jenner, portfolio manager of the T. Rowe Price Health
Sciences Fund, told the Reuters Health Summit in New York on
Monday. [ID:nN08119917]

“It’s going to be somewhere between what Sanofi wants to
pay and what Genzyme wants them to pay. My sense is that
anywhere between $75-$80 (per share) seems perfectly reasonable
… I think Sanofi will prevail but they will prevail at a
higher price.”

Genzyme officials have not been in contact with Sanofi
since the French drugmaker launched its hostile bid on Oct. 4.
Sanofi shares closed little changed at 51.03 euros, while
Genzyme shares closed down 0.9 percent at $71.06 on the
Nasdaq.
(Additional reporting by Noelle Mennella in Paris, Toni
Clarke, Esha Dey and Ben Hirschler in New York; Editing by
James Regan, Elaine Hardcastle and Matthew Lewis)

UPDATE 3-Sanofi asks Genzyme to let investors decide on bid