Aventis, the Franco-German drugs group, yesterday rejected an audacious €48.5 billion hostile bid from French rival Sanofi-Synthelabo, a deal that would create the world's third-largest drugs group.
Aventis, which has hired Goldman Sachs, Morgan Stanley and Rothschild to defend itself, said the bid represented a premium of only 3.6 per cent on its closing share price on Friday.
It said its management board, chaired by chief executive Mr Igor Landau, considered Sanofi's bid to be "hostile" and below the "economic value of their company". It would recommend the group's supervisory board reject it.
However, Sanofi said its offer - a mix of 81 per cent shares and 19 per cent cash that values Aventis at €60.43 a share - was "attractive" as it represented a 15.2 per cent premium over the average share price in the first 21 days of January.
Aventis employs 200 people in Ireland, 120 at a manufacturing plant in Waterford and 80 at its commercial offices in Citywest, Dublin. In 2002, it closed a manufacturing plant in Nenagh, Co Tipperary, with the loss of 230 jobs.
Another company which may be affected by the takeover bid is clinical trials group Icon, which is listed on the Dublin and Nasdaq stock markets.
Mr Peter Frawley of Merrion Stockbrokers said Sanofi accounted for 11 per cent of Icon's revenues in the 2003 financial year, making it the group's second-largest client. However, he said: "We understand that this has fallen to mid-single digit levels presently.
"While this is negative news for Icon in the short-term, as drug companies tend to slow the rate of outsourcing during the takeover process as they rationalise and integrate their research activities, it does provide a longer-term opportunity as Icon did not previously have a relationship with Aventis."
If successful, the deal would create a French "national champion" based in Paris, with sales of €25 billion and more than 100,000 employees.
It would compete with the UK's GlaxoSmithKline for second place in the pharmaceutical industry behind Pfizer of the US.
The attraction for Sanofi of making a hostile bid now is to use its more highly valued paper to snatch control of its larger rival before a court case this year over the US patents on Plavix, the blood-thinner that is its second-biggest selling drug.
Furthermore, a shareholder pact between cosmetics group L'Oreal and oil group Total expires in December, leaving Sanofi vulnerable to takeover.
L'Oreal and Total together own 44 per cent of Aventis.
Aventis said the offer would make its shareholders "support the significant risks linked to the main products of Sanofi-Synthelabo without any compensation".
It said it was examining other scenarios, which "present a stronger industrial and social logic".
Sanofi has already won the backing of the French government for its bid.
