Sanofi to make formal Genzyme offer

France's Sanofi-Aventis plans to make a formal offer of up to $18.7 billion for Genzyme after its informal overture failed to strike interest, sources familiar with the situation said on Wednesday. The board of Sanofi met in Paris on Wednesday and authorized management to make a formal offer of up to $70 per share for Genzyme, sources said. Sanofi has bank commitments of funding that would allow it to raise that bid if needed, one source said. A second source cautioned that no formal proposal had been made yet and plans could still change.

Genzyme has a market capitalization of about $18nn. At $70 per share, Sanofi would be offering a premium of roughly 30 per cent over what the price of Genzyme's stock was before news of takeover interest emerged. The Wall Street Journal, citing people close to Genzyme, suggested that about $75 a share could be sufficient to win the support of Genzyme's board. Sanofi, which is scheduled to report second-quarter earnings on Thursday, declined to comment. Genzyme could not be immediately reached for comment. Shares of Genzyme gained 5 per cent to $71.20 in extended trading on Wednesday after news of the board meeting.