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What Genzyme's CEO Doesn't Know, and Doesn't Want to Know, About Sanofi's Hostile Bid

Sanofi-Aventis (SNY) CEO Chris Viehbacher has again written to Genzyme (GENZ) CEO Henri Termeer begging for a meeting at which he might present Sanofi's rationale for acquiring the company. Termeer's persistent refusal to talk to, meet, or listen to Viehbacher's team raises the possibility that Termeer has sealed himself inside an isolation bubble and doesn't actually have all the information he needs to properly evaluate Sanofi's $69/share offer or to negotiate it it higher if need be.

It's not until you look at how few contacts Termeer has had with Sanofi that you realize how little Termeer might know about why Sanofi wants to takeover his company. The two men have met exactly once since Sanofi first approached Genzyme in May. Termeer refuses to allow Viehbacher's bankers to perform due diligence on Genzyme's books. Termeer even rejected Sanofi's offer before he knew what price was being offered, and then rejected the offer again once the price was announced. The two sides are literally making guesses, based on incomplete information, about the future of Genzyme.

Here's a timeline of contacts between the two companies, drawn from Sanofi and Genzyme's SEC filings:

  • May 23: Termeer receives a call from Viehbacher. Termeer tells him he will call Viehbacher back after Genzyme's annual meeting. He doesn't.
  • June 28: Viehbacher calls Termeer again. Termeer says he will get back to Viehbacher.
  • July 7: Termeer tells Viehbacher he cannot meet until after a board meeting on July 9.
  • July 10: Termeer calls Viehbacher to say he rejects Sanofi's offer, even though he has not actually heard it yet.
  • July 29: Viehbacher calls Termeer to say a written proposal is on its way anyway, including a price: $69.
  • July 30: Termeer calls Viehbacher to say thanks for the letter.
  • Aug. 2: Termeer writes a letter to Viehbacher saying he will get back to him.
  • Aug. 3: Genzyme's financial advisers reject a request by Sanofi's advisers to do financial due diligence.
  • Aug. 11: Termeer writes a letter rejecting Sanofi's $69 bid.
  • Aug. 12: Termeer calls Viehbacher to reiterate his rejection of the bid.
  • Aug. 20: Genzyme's bankers again reject Sanofi's attempts to perform due diligence.
  • Aug. 24: Genzyme's bankers meet with Sanofi's, and again refuse to cooperate.
  • Aug. 29: Viehbacher writes to Termeer complaining that Termeer is unwilling to have constructive discussions.
  • Aug. 30: Termeer writes to Viehbacher again rejecting his $69 bid:
  • Sept. 20: Viehbacher and Termeer meet in person for first time. Viehbacher gave a "narrow" presentation of his ideas. "During the meeting, Mr. Termeer stated that he was in no hurry, the timing for a transaction was not right, and he suggested to Mr. Viehbacher that [Sanofi] withdraw its offer and consider re-initiating contact in 2011." Termeer declined to say what he thought his company was worth.
  • Oct. 4: Viehbacher again writes to Termeer complaining that Termeer won't engage in a dialog. The bid is now officially hostile.
  • Oct. 22: A Genzyme press release suggests the company is worth $89/share.
  • Nov. 8: Viehbacher requests another meeting, and complains that Termeer is adopting poison pills that will prevent Sanofi from buying Genzyme's shares.
Termeer has spent a lot of time listening to his own bankers and his own board advising him that $69 is too low. Sure, this is a hostile bid and obviously Termeer and his team want to get Sanofi to increase its price. But they're rejecting the deal without having heard, in full, what the deal is. Even if they don't want to accept it, you'd think that listening in detail to Viehbacher would be a useful defense tactic: Who doesn't want to know as much about their enemies' capabilities as possible? Termeer, apparently.


Image by Flickr user JohnSnape, CC.