Sanofi-Aventis finally made a hostile $18.5 billion tender offer for Genzyme, but it acknowledged that Genzyme's willingness, and possibly a higher price, may be needed to succeed.

More than four months after first broaching the idea with Genzyme, French drugmaker Sanofi lost patience in trying to woo the U.S. biotech company to the negotiating table and took its offer directly to Genzyme shareholders.

Sanofi kept the bid at $69 per share, a price already rejected by Genzyme's management, citing Genzyme Chief Executive Henri Termeer's repeated refusal to discuss a deal.

Sanofi CEO Chris Viehbacher said he would be willing to raise the bid if Genzyme made the case for higher value. Some Genzyme investors and analysts cited a price above $75 per share as necessary to seal a deal.

Viehbacher also acknowledged the difficulty in maintaining a hostile takeover stance.

"You can't really acquire a company in the U.S. without ultimately the approval of the company's board," Viehbacher told reporters on a conference call. "So we are at any time happy to sit down with management and the board ... (the) problem we have is we have been rebuffed."

Some hostile deals manage to succeed without raising the price, such as Korea National Oil Corp's $2.9 billion deal for Dana Petroleum, but such an outcome is rare.

"This is the first step in saying we're going to do this one way or the other. Clearly, $69 is just the opening bid there," said Jon LeCroy, analyst with Hapoalim Securities. "I think a deal is going to happen. The question is just price and timing."

Shares of Genzyme traded at $71.10 after Sanofi's announcement, indicating that investors expect a higher offer. Genzyme said it would review the offer, due to expire late on Dec. 10, and advise shareholders of its position within 10 business days.

"Given Genzyme's unwillingness to engage Sanofi in a constructive debate so far, we are not surprised Sanofi has decided to go this route, and see this as a move designed to get Genzyme to the negotiating table," said Baird analyst Christopher Raymond.

Sanofi Has Hostile History
Sanofi is no stranger to hostile deals. The deal that created the current Sanofi-Aventis itself started out as hostile, with Sanofi-Synthelabo launching an unsolicited $60.2 billion bid for larger rival Aventis in 2004.

So far this year, 17.4 % of U.S. deals have been unsolicited, according to FactSet MergerMetrics. That is down from a high of 23.9 % of deals in 2008, but more than twice the level seen in 2004.

"Sanofi-Aventis has a history of being a patient, disciplined buyer," Viehbacher stressed on Monday. "We believe the offer will be successful ultimately."

Industry-watchers see parallels between Sanofi's pursuit of Genzyme and Roche's takeover of Genentech last year. Roche played a notable game of hardball by launching a tender offer for Genentech that was below the initial price proposed to the company.

Shareholders did not take up the tender offer, but it paved the way for a friendly deal, at a sweetened price.

Japan's Astellas Pharma had an easier time launching a $3.5 billion hostile bid in March for OSI Pharmaceuticals to gain access to the blockbuster Tarceva cancer drug. Within two months, it sealed a $4 billion, friendly deal with OSI's board.