Novartis Says It Is Exploring Combination With Aventis
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP
ZURICH -- Novartis AG Friday said it is exploring the feasibility of a combination with Aventis SA, which is the target of a €46.1 billion ($56.4 billion) hostile bid by Sanofi-Synthelabo SA.
Novartis said no decision has been taken yet whether or not to pursue a transaction. The Switzerland-based pharmaceuticals company was responding to a request from French stock-market authorities.
The Wall Street Journal reported earlier this week that Novartis has hired investment bankers to help it consider whether to step in as a white knight for Aventis, citing people familiar with the situation. Major shareholders continue to signal that they expect a higher bid for Aventis.
Aventis, France's largest drug maker, has rejected Sanofi's bid, saying it isn't only too low but also not in Aventis's strategic interest. Aventis has said it wants to be a bigger player in the U.S. pharmaceuticals market.
On Thursday, Sanofi-Synthelabo defended the strategic rationale for its Aventis bid while acknowledging that investors expect a sweetened offer. "The market does want a higher price," said Sanofi's Chief Executive Jean-Francois Dehecq. "But we have to allow for things to evolve."
While Sanofi may not sweeten its bid immediately, it appears willing to reconsider its position should the landscape change significantly. "It depends on what happens in the market and what the activities are [regarding] a white knight," said Mr. Dehecq in an interview.
Novartis appears to be one of the likeliest of the possible white knights. Analysts say Novartis offers a better fit in terms of its drug portfolio than Sanofi does. A Novartis-Aventis union would create the second-largest drug maker in the world with a large presence in the U.S.
Shares of Novartis fell 4.3% to 54.30 Swiss francs ($42.13) Thursday on speculation that the drug giant is preparing to offer 0.9 Novartis share and €35 in cash a share for Aventis, which would value the French company at €66 a share, based on Novartis's closing stock price Thursday.
Novartis was down another 2.2% in trading early Friday, at 53.10 francs a share. Aventis was off 0.1% at €62.40 a share.
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Updated March 12, 2004 3:57 a.m.
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