Zentiva SA - Sanofi launches public bid to minorities at RON 0.7 per share

French pharmaceutical group Sanofi - Aventis, controlling shareholder (75% stake) of the producer of drugs Zentiva SA Bucharest, will launch between 12 August and 22 September 2009 a takeover offer on the remaining shares (representing 25% stake) of the company, worth RON 73.23m (€ 17.4m). Sanofi - Aventis offered a price of RON 0.7 lei for one share Zentiva SA, 3.7% above yesterday's closing price of RON 0.675 per share. According to the notice of the takeover offer, French drugmaker intends to delist the company after it collected 95% stake. Zentiva NV has purchased it’s 51% stake in Zentiva SA at RON 1.3 per share in September 2005 and bought an additional 24% stake subsequently in a public bid offer.

Our view:
We recommend shareholders to accept the public bid offer of Sanofi. Our fair value estimate on Zentiva SA of RON 0.35 per share stands 50% below the public bid price offer of RON 0.7 per share. Market has been speculating for a public bid offer on Zentiva SA’s shares as Sanofi indirectly taken over this firm, when it concluded the full takeover of Czech Zentiva NV in April 2009. According to European rules, a public bid offer must be made in case of indirect offers; however it was not clear for long whether Romanian rules are fully harmonized in this respect.