French drugmaker Sanofi-Aventis plans to make a 40.04 billion crown ($2.57 billion) offer for Czech drugmaker Zentiva, trumping a bid from financial group PPF. The move would take Sanofi deeper into the field of generic drug production, an area which has traditionally been shunned by large pharmaceutical companies but is now receiving increased interest as a way to tap booming emerging markets.
Sanofi - already a key shareholder in Zentiva, with 24.9 percent - said on Wednesday it planned to offer 1,050 Czech crowns per Zentiva share. That pitted Sanofi against Czech financial group PPF, which formally launched a 950 crown per share offer on Tuesday, and analysts said a bidding race may begin.
Zentiva shares rose 6.7 percent to 1,110 crowns by 1315 GMT, above both bids and the stock's highest level since October 2007. It was the biggest gainer among large capitalisation shares in central Europe. Sanofi traded 1.4 percent up at 42.63 euros. Sanofi offered a premium of around 10.5 percent to PPF's bid and the French company, which is the world's third-largest drug maker by sales, said buying Zentiva made strategic sense.
"Sanofi-Aventis is already established in the various markets where Zentiva operates. The intended acquisition of the control of Zentiva carries a strong strategic rationale," Sanofi said in a statement. Zentiva said its board would meet on the new offer, and urged shareholders not to take any action for the moment. On Tuesday, Zentiva told shareholders to take no action on PPF's bid, adding it would call a shareholder meeting.