GenzymeOne of the most interesting merger and acquisition sagas of the past month is no doubt the French drugmaker Sanofi-Aventis' (SNY) courtship of rare-disease biotech Genzyme (GENZ). On Monday, Genzyme has confirmed that it has received Sanofi's unsolicited proposal of $69 per share in cash, adding its the board of directors unanimously rejected the proposal -- again.

Sanofi, over the weekend, mounted pressure on Genzyme when it made public its month-old proposal to buy the U.S. biotech firm for $18.5 billion after it attempted unsuccessfully to hold talks with management. While Sanofi hasn't approached shareholders directly, the hint was clear: Sanofi could make a hostile takeover bid.

This morning, in a letter addressed to Sanofi-Aventis CEO Chris Viehbacher, the board named Sanofi's proposal opportunistic at least three different time, and reiterated what board members stated when they responded on August 11 to his offer from July 29: "without exception, each member of the Genzyme board believes this is not the right time to sell the company, because your 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 letter continues to note that Genzyme has provided Sanofi with non-public information regarding progress the company has made to improve its manufacturing capacity, as well as other futures upside potentials. Despite all the progress Genzyme has made, the letter states, Sanofi did not increase its proposal, which Genzyme called "an unrealistic starting price that dramatically undervalues our company."

Sanofi's offer is a far cry from what Genzyme and its shareholders -- including activist investors Carl Icahn and Ralph Whitworth -- believe the biotech should fetch. Some analysts have said the company could be worth $80 or even $85 a share, but rumors suggest that Genzyme's board would accept an offer no lower than $75 a share.

The rare-disease drugmaker is coming off a turbulent year, which saw sales and profit slump as a result of severe manufacturing problems. But Sanofi-Aventis will soon run up against trouble of its own: a major patent cliff. Five of its eight best-selling drugs will lose patent protection and face generic competition by 2012, and purchasing Genzyme could help it offset lost sales and boost its weak biotech division.

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