BOSTON (Reuters) - Genzyme Corp GENZ.O Chief Executive Officer Henri Termeer said he expects a deal with French drugmaker Sanofi-Aventis (SASY.PA) “will work itself out.”
Genzyme is the target of an $18.5 billion hostile bid from Sanofi, although the two sides confirmed recently they were in discussions.
Termeer, speaking at the Greater Boston Chamber of Commerce on Wednesday, said Sanofi’s approach is “very honest” and “a great compliment.”
“Both sides have said it will take some time” to understand the value, the CEO said.
“It will work itself out,” he said. “There is no knowing where it will go or how it will work itself out. We are very focused on running the company.”
Genzyme has rejected Sanofi’s $69-a-share takeover offer as too low, but the two sides have said they are talking about a way to bridge the valuation gap by focusing on prospects via a deal structure known as a contingent value right (CVR).
A CVR would offer Genzyme shareholders an additional payout based on its Campath medicine being approved for multiple sclerosis and meeting certain revenue targets.
In an interview with reporters after his speech, Termeer said that discussions around a contingent value right will “at the very minimum” act as a mechanism to establish an appropriate value for the company.
Whether a CVR will be part of an ultimate deal remains to be seen, he said.
Termeer declined to give any timeframe for the discussions to be complete except to say neither side is any rush.
“If we do have a transaction, we will have a transaction for the right reasons,” he said.
Termeer said that an acquiring company must recognize the value of Genzyme, integrate it properly and extend the benefits it has created.
“Only then will you get the benefit from the investment you make,” he said.
Genzyme shares were down 0.3 percent to $71.81 in morning trading on Nasdaq. Sanofi shares were off 0.2 percent in Paris.
Reporting by Toni Clarke, writing by Lewis Krauskopf, editing by Gerald E. McCormick, Dave Zimmerman