Genzyme Corporation Investors Lawsuit Over Alleged Securities Laws Violations

If you are an investor in Genzyme Corporation (NASDAQ:GENZ) shares, who purchased GENZ prior to July 23, 2010, you have certain options and there are short and strict deadlines running. Deadline: December 20, 2010. Those GENZ investors should contact the Shareholders Foundation, Inc.

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Company Name(s): 
Genzyme Corporation
Case Name: 
Genzyme Corporation Deal Case 10/20/2010
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: GENZ
Lawsuit Overview
Type of Lawsuit: 
Mergers and Acquisition
Date Filed: 
10/20/2010
Court of Filing: 
U.S. District Court for the District of Massachusetts
Deadline To File for Lead: 
12/20/2010
Summary: 

Another investor in Genzyme Corporation (NASDAQ:GENZ) filed a lawsuit in the United States District Court, District of Massachusetts on behalf of current shareholders of Genzyme Corp. against Genzyme, certain of its top officials, and members of its Board of Directors .

According to the complaint the plaintiff alleges that the defendants violated Section 14(e) of the Securities Exchange Act of 1934 and breached their fiduciary duties to Genzyme shareholders, in connection with a tender offer by Sanofi-Aventis SA ("Sanofi").
In July 2010, Sanofi attempted to engage Genzyme in discussions concerning a potential acquisition of Genzyme by Sanofi. Specifically, Sanofi proposed to purchase Genzyme for $69 per share, a transaction valued at approximately $18.5 billion.
On 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. The plaintiff alleges that Genzyme rejected Sanofi's non-coercive, good faith, premium offer, despite Sanofi's stated willingness to consider significant increases in its offering price, perhaps to as high as $80 per share, if Genzyme allowed Sanofi to conduct a due diligence review of confidential business information. However, Genzyme refused to allow Sanofi's due diligence review unless Sanofi first raised its price, without specifying any particular price it wanted Sanofi to offer.

The plaintiff says that on October 7, 2010, Genzyme, with the approval of its Board of Directors, issued a materially false and misleading Solicitation/Recommendation Statement on Schedule 14D-9. The 14D-9, which recommends that Genzyme shareholders reject the Tender Offer and not tender their shares, omits and/or misrepresents material information and fails, among other things, to provide any credible explanation of why the Board of Directors refuses to negotiate with Sanofi and allow Sanofi to conduct a due diligence review that might support a higher offering price. Instead, the 14D-9 states that Sanofi's offering price is not high enough to warrant either negotiations or allowance of a due diligence review by Sanofi. However, given Sanofi's expressed willingness to consider raising its offering price to as high as $80 per share, Genzyme's position is untenable, so the lawsuit.