(Adds analyst quote, background)
By Jan Mlcochova
PRAGUE, Feb 4 (Reuters) - Czech investment group PPF has
launched an attempt to replace the management of Zentiva
<>, putting presure on a bid for the Czech generic
drugs company by French Sanofi-Aventis <SASY.PA>.
Zentiva said on Wednesday that PPF, its second largest
shareholder after Sanofi, had asked a court to call a
shareholder meeting at which PPF would propose firing the board
and replacing several directors with its own nominees.
Zentiva said it would fight the legal action. Its board, led
by chairman Jiri Michal, supports a Sanofi bid valuing the firm
at $2 billion, or 1,150 crowns per share.
Purchasing Zentiva would take Sanofi, whose top selling
drugs include blood-thinner Plavix and anti-thrombotic drug
Lovenox, deeper into the field of generics, previously shunned
by large pharmaceutical companies but now seen as an entry point
to booming emerging markets.
"On the basis of all available information the board
believes the legal proceedings that PPF has initiated are
entirely without merit," Zentiva said.
Zentiva shares were down 1.2 percent at 1,120 crowns at 1125
GMT, while the main PX index <> was up 0.4 percent.
PPF, a closely-held investment group controlled by financier
Petr Kellner, had no immediate comment but said it would issue a
statement later.
PPF has withdrawn its own 950 crowns per share offer for
Zentiva but has otherwise not reacted to the Sanofi bid.
Sanofi owns 24.9 percent of Zentiva while PPF controls a
24.3 percent stake, according to Zentiva, whose management holds
5.9 percent. Analysts said PPF may have wider control through
other shareholders.
"It is probable that at this moment they control more than
Sanofi and the management," said Josef Nemy, an analyst at
Komercni Banka. "If they raise this demand, then probably they
believe they will push it through."
Sanofi's bid is conditional on it acquiring a majority in
Zentiva. Nemy said PPF's move showed it was not interested in
selling to Sanofi at 1,150 crowns. "This fairly lowers the
chance to get a majority (for Sanofi). So maybe it is a push
from PPF how to increase the offer price," Nemy said.
Zentiva is set to hold an extraordinary shareholder meeting
on the Sanofi bid on Feb. 9. The bid expires on Feb. 20. The
European Commission was due to release a review Sanofi's offer
on Wednesday.
Other Zentiva owners whose shares are in play include
privately-owned investment group J&T with 7.6 percent and
Belviport Trading Ltd, a closely-held firm with anonymous
owners, with 10.06 percent.
PPF announced its acquisition of a part of J&T's core
business last week but a J&T spokesman said the group's stake in
Zentiva was not part of the deal.
(Additional reporting by Jan Korselt; Editing by Will Waterman
and Dan Lalor)
