Genzyme Corporation Investor Files Lawsuit Against Board of Directors

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Company Name(s): 
Genzyme Corporation
Case Name: 
Genzyme Corporation Deal Case 08/31/2010
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: GENZ
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
08/31/2010
Summary: 

An investor in Genzyme Corporation (NASDAQ:GENZ) filed a lawsuit in Federal Court against the board of directors of Genzyme Corp. alleging breaches of fiduciary duty in connection with the proposed takeover of Genzyme by Sanofi Aventis SA.

On Sunday, August 29, 2010, the French drug developer Sanofi-Aventis offered $69 a share for Genzyme. The following day the board of directors of Genzyme said that it rejected Sanofi-Aventis’s $18.5 billion buyout offer on the ground that it undervalued the company. Rumors about a potential buyout of biotechnology company Genzyme started already on July 23, 2010 causing Genzyme shares (GENZ) to jump from $54 to $65 on July 23, 2010, and to continue to raise to $70, after additional reports emerged that Paris-based Sanofi Aventis SA will support a bid up to $70 per share.

According to the complaint the plaintiff alleges on behalf of all public shareholders of Genzyme breaches of fiduciary duties, aiding and abetting breaches of fiduciary duties and seeking injunctive relief against Genzyme, certain officers and directors of Genzyme, and others in connection with the potential sale of Genyzme. The Complaint alleges, among other things, that while a proposed acquisition at $70 per share is ostensibly at a premium, Genzyme’s stock price recently traded at more than $83 per share and that at least one third party believes Genzyme could achieve a stock price as high as $90 per share.