Dollars and Jens
Friday, January 30, 2004
More Sanofi/Aventis
Aventis SA Thursday said it aims to fend off a hostile bid launched by smaller rival Sanofi-Synthelabo SA because the offer terms undervalue the Franco-German drug-maker by 30% to 40%.

The gap between the price of Aventis SA shares and their value as implied by a hostile bid from smaller rival Sanofi-Synthelabo SA increased to 5.7% Thursday from 4.5% Wednesday, a sign that investors are betting a higher bid may come.

Sanofi is running an ad targeted at Aventis shareholders in Europe. According to the article, this is illegal in the U.S. If anyone can explain why, I'd love to hear it. Anyway, the ad has a picture of a boy having his blood pressure checked by a med student:
The baseline reads: "Who's going to tell Louis that the drug which will cure him will be ready only in 20 years time? You? No. No one. Our merger with Aventis will allow researchers to take a big step forward, will put new, innovative medicines at the disposal of patients faster."

The ad, which implies that a merger would help cure the boy, also ran in Spain and Switzerland as well as in publications with a pan-European reach. It didn't run in the U.S., where advertising a takeover bid is prohibited, Sanofi's ad firm Publicis SA said.


Sanofi has said it decided to launch the bid Monday because it feared it could itself become a takeover target.


[I]n Germany, home to 9,000 Aventis employees, little Jan is getting Sanofi in trouble.

His appearance on newspaper pages Wednesday has prompted several complaints filed to the country's Advertising Council, said Germany's Nickel. He declined to say who had filed the complaints but said they all focused on the moral aspect of the campaign.

One complaint says the ad put the "emotional gun" on audiences' chest.

The ad council passed on the file to Germany's Competition Commission to look into whether Sanofi had the right to imply that taking over Aventis would help shorten research delays and foster innovation. The commission deals with unfair competition and has sent a letter to Sanofi, urging the French company to stop the ads.


In France, where the government has expressed support for the bid, the ad industry watchdog Bureau de Verification de la Publicite said the Sanofi's ad didn't breach local regulations because Louis stopped short of directly recommending the bid.

"On French highways, when you drive at 130 km/h, you're at the maximum authorized speed, but you're not breaking the law," said a person familiar with the BVP's thinking, requesting anonymity.

Both Sanofi and Publicis are members of the BVP.
I'm curious how this French law reads, that would make it illegal for "Louis" to expressly advocate selling, but that isn't otherwise broken. For now, I'll just assume that they're all full of it.

Meanwhile, someone has convinced the German Economic Minister that no German researchers at Aventis would lose their jobs. Well, as Derek Lowe points out, someone, somewhere, is likely to lose a job -- that's a lot of the point of merging companies.

And last, but certainly not least, Novartis is considering bidding for Aventis.

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