Healthy Skepticism Library item: 308

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Publication type: news

Stewart H.
Aventis goes to court to block Sanofi
The Guardian 2004 Apr 21

Full text:

Aventis accused its suitor Sanofi yesterday of “a pattern of misinformation and other unlawful conduct”, as it sought protection from the US courts against its rival’s £30bn hostile takeover bid.

Filing for an injunction against Sanofi’s offer to US investors, who own a quarter of its shares, Aventis launched a bitter attack on the Paris-based drugmaker’s tactics.

The latest salvo in the increasingly acrimonious three- month takeover battle accused Sanofi of trying to “dupe” shareholders by misrepresenting its bid, and using “underhand efforts to cause the French government to derail more attractive offers from competing bidders”. Sanofi said it would vigorously defend itself against the legal action. “Aventis’s claims should be made in the market instead of the court house.”

Aventis placed the blame for French political intervention in the takeover battle firmly at Sanofi’s door, saying it had used meetings with high-level officials – even before the offer was made public – to “co-opt the French government to interfere proactively with Aventis’s efforts to secure a higher price for shareholders”.

Overseas investors have become increasingly angry at the open backing of France for Sanofi’s bid, which has so far deterred Swiss company No vartis from making a “white knight” rescue for Aventis. Prime minister Jean-Pierre Raffarin has suggested Paris might cite the need to vaccinate the public against potential bio-terrorist attacks as a reason for overruling the bid on grounds of the French national interest. French shareholders have threatened to sue for compensation if they believe any final price has been depressed by the intervention.

Yesterday’s submission to the US courts echoed the arguments in the case that Aventis has launched against the bid in the French courts, expected to be decided next month.

It accused Sanofi of making its audacious bid to protect itself from becoming a takeover target, while representing the deal as enhancing shareholder value. Caught off guard in January by the surprise offer, Aventis also accuses Sanofi of misleading shareholders by insisting it was engaged in “no negotiations” when it was already talking to financial advisers about its plans.

Aventis’s shareholders will vote next month on a plan to issue warrants insuring them against the loss of patent protection for Sanofi’s top-selling drug, Plavix, if the deal goes through. Yesterday’s court-documents accused Sanofi of trying to “sweep its Plavix-related troubled under the rug”, again to mislead investors about the value of its part-cash, part-share bid.