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Tete a Tete

October 5, 2010

With yesterday’s filing of a third party tender offer, French biopharmaceutical giant Sanofi-Aventis appealed directly to the shareholders of its acquisition target, Massachusetts-based Genzyme Corp.  See the filing’s Summary Term Sheet for an overview of the offer.

The Fencing Lesson, Johann Gottfried Schadow (1814)

The hostile takeover bid was anticipated by some and not by others.  (Citigroup defeats Barclays Capital in this battle of prognosticating analysts.) But to judge by recent communications between the companies’ CEOs, Henri Termeer of Genzyme and Christopher Viehbacher of Sanofi, it’s hardly shocking that things turned “hostile.”  Indeed, that had already happened in the conversation thread (included in the filing) leading up to yesterday’s takeover bid.

At first, the correspondence is cordial. But there is a perceptible shift in tone in Termeer’s  August 11 letter to Viehbacher.  Termeer writes: “[Y]our opportunistic takeover proposal does not begin to recognize the significant progress underway to rectify our manufacturing challenges or the potential for our new product pipeline” — the word “opportunistic” in particular standing out as a verbal parry at the company from Paris.  On August 29, Viehbacher responds in kind. Writing that he and his fellow board members are “disappointed” at Termeer’s unwillingness even to meet with us,” Viehbacher frames Genzyme’s recent financial troubles in a way that seems calculated to ruffle feathers:  “Genzyme has underperformed its peers for a number of years.”

From there, the communications are generally prickly. Termeer repeats his “opportunistic” charge; Viehbacher reiterates how “disappointed” and “frustrated” he is by Termeer’s  “refusal to have meaningful discussions with us.”  Less antagonistically — but perhaps more tellingly — Viehbacher writes that he and his colleagues “are prepared to consider all alternatives to complete this transaction.”  We now know that was no bluff.  

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