(Adds Sanofi comment, analyst, shares)
By Jason Hovet
PRAGUE, July 18 (Reuters) - Zentiva <> advised its
shareholders on Friday to reject a $2.1 billion takeover offer
by France's Sanofi-Aventis <SASY.PA>, as investors awaited a
higher one in the bidding war with a Czech financial fund.
Already Zentiva's largest shareholder with a 24.9 percent
stake, Sanofi-Aventis launched its 1,050 Czech crown per share
bid a week ago, valuing the offer at 30 billion Czech crowns
($2.06 billion) and the entire company at 40 billion crowns.
It trumped a 950 crown per share offer from Czech financial
group PPF, which Zentiva rejected last month. PPF has a 19.2
percent stake.
Zentiva's board said Sanofi's offer failed to reflect the
underlying value of the company and its future prospects.
Shares in Zentiva showed little reaction to the statement,
rising 0.4 percent to 1,125 crowns in light trade by 0810 GMT,
outperforming Prague's PX index, which lost 0.7 percent.
"The bid is under the actual market price, so it is not a
big surprise that Zentiva's management rejected the offer," said
Jan Krejci, an analyst with Patria Finance in Prague.
"There is still some speculation on the market that there
will be a second round of bidding."
If Sanofi's bid succeeds, it would give the world's third
largest drug maker by sales a bigger foothold in the fast
growing east/central European markets.
It would also take it deeper into the field of generic drug
production, an area which has been traditionally shunned by
large pharmaceutical companies but is now seen as a path to tap
booming emerging markets.
"We believe (our offer) reflects a fair valuation of the
company," a Sanofi spokesman said on Friday.
PPF said it had no comment on Zentiva's statement.
Shares in Zentiva, which makes copies of drugs like
paracetamol and ibuprofen, had been battered since October 2007,
when they traded at 1,570 crowns, after stumbling due to
problems on the Romanian market.
However, shares have gained more than a fifth since the
beginning of May when PPF announced plans to launch an offer.
"The challenges faced in the second half of 2007 have
largely been addressed and Zentiva is in the process of
rebuilding investor confidence through the demonstration of
improved financial performance," Zentiva said in a statement.
The company also said it expected strong 2008 results and
reiterated guidance of a 20 percent revenue increase.
Zentiva's revenue rose 19 percent in 2007 to 16.67 billion
crowns, but net profit fell 35.9 percent to 1.46 billion crowns.
Zentiva also said Sanofi's bid is subject to certain
conditions, such as competition law clearance in the European
Union and individual countries, which could hamper its offer.
Sanofi has said its offer is contingent on receiving at
least 50 percent in the company.
(Reporting by Jason Hovet; Editing by Chris Borowski and Tony
Austin)
