Investors Suing Genzyme Over Its Handling of Sanofi’s $18.5B Buyout Bid
Genzyme (NASDAQ:GENZ) is fending off multiple shareholders who are suing the Cambridge, MA-based biotech company for rejecting French drug giant Sanofi-Aventis’s $18.5 billion buyout offer, according to court documents filed with the SEC. Bloomberg News reported the lawsuits in a story Tuesday afternoon.
The lawsuits call attention to Genzyme’s repeated rejection of Sanofi’s (NYSE:SNY) offer to buy the maker of drugs for rare genetic diseases for $69 per share, or $18.5 billion. In one such lawsuit, filed September 8 in U.S. District Court in Boston, an investor claims that Genzyme “deprived [shareholders] of the opportunity to realize fully the benefits of their investment in the company” by turning down Sanofi’s buyout offers. On October 4, Sanofi went directly to Genzyme’s shareholders with a tender offer to buy their stock for $69 per share. Genzyme has recommended that investors not to take Sanofi’s tender offer, repeating that the proposed price undervalues the company.
Bloomberg wrote yesterday that Genzyme declined to comment on the lawsuits. In an SEC filing last week, the company says the lawsuits are without merit and it plans to defend itself against them. Still, the suits lend some weight to Sanofi CEO Chris Viehbacher’s argument that Genzyme shareholders’ support his firm’s bid to buy the biotech. Last week, Viehbacher stated in a letter to Genzyme CEO Henri Termeer that his firm had met with investors who controlled more than 50 percent of Genzyme’s stock, and that “it was clear from our meetings that your shareholders are supportive of our initiative and, like us, are frustrated with your refusal to have meaningful discussions with us regarding our proposal.”
Genzyme’s common stock was listed at $72.69 per share at 11 am Eastern time. The current price might indicate that investors are betting that Sanofi is willing to pay more than $69 per share to acquire Genzyme.