Sanofi starts takeover bid for Zentiva

MondayMorning, July 14, 2008

Sanofi Starts Takeover Bid for Zentiva. Sanofi-Aventis SA, France's biggest drugmaker, made its $2.02 billion offer for the remainder of Zentiva NV official last week, trumping PPF Group NV's bid for the Czech drugmaker. Sanofi already owns a 24.9% stake and published its 1,050 koruna-a-share bid Friday in Hospodarske Noviny. The offer values Zentiva at 40 billion koruna ($2.7 billion), Sanofi said. PPF, the Czech Republic's largest closely held financial group, is offering 950 koruna a share, valuing Zentiva at $2.3 billion. The French drugmaker wants Zentiva in order to expand into Eastern Europe's "branded generic" market, where copies of original medicines are more profitable than in Western Europe. Its bid, which it unofficially made June 18, is subject to obtaining just more than 50% of Zentiva shares. The bidding period began Friday and lasts until Sept. 19, and may be extended. "Shareholders are strongly advised not to take any action in regards to the published offer," the Czech company said. Investors should wait until the board issues an opinion on the bid "in due course," Zentiva said. PPF spokesman Alexej Bechtin declined to comment on whether his company would raise its bid. PPF published its offer on June 17, and said it may offer a "more favorable" price.

Under a new Czech law, takeover bids are automatically extended should a rival company publish a competing bid. PPF can therefore extend its bid to Sept. 19. PPF owns almost 20% of Zentiva and wants a stake that will let it influence the drugmaker's day-to-day operations.