AnorMed Accepts Genzyme's $580 Million Buyout Offer Over Rival Millennium Pharma Bid

Biotech drug maker Genzyme Corp. entered an agreement Tuesday to acquire competitor AnorMed Inc. for about $580 million, trumping a rival offer for the Canada-based company from Millennium Pharmaceuticals Inc.

Last week, AnorMed declared Genzyme's $13.50 per share cash offer superior to Millennium's offer of $12 per share or $515 million in total. AnorMed said that if Millennium did not to match Genzyme's proposal, then its board would enter into a support agreement negotiated with Genzyme.

Cambridge, Mass.-based Genzyme had raised its offer for the company from a previous bid of $8.55 per share, or $380 million.

Millennium may be entitled to a $19.5 million break up fee from AnorMed. Representatives at Millennium were not available for immediate comment.

Genzyme and AnorMed hope to close the transaction soon after the tender offer expires on Nov. 6.

The centerpiece of the acquisition for Genzyme is AnorMed's Mozobil, a drug candidate that promotes stem cell production and is currently in late-stage clinical development trials. Mozobil is expected to hit the market in 2008.

Should AnorMed accept a better offer that Genzyme does not match, Genzyme may also be entitled to a $19.5 million break up fee.

The deal must still gain clearance from AnorMed shareholders and antitrust clearance from regulators. Genzyme expects the transaction to dilute earnings through 2008 and add to them in 2009. Analysts surveyed by Thomson Financial expect earnings per share of $2.74 in 2006, $3.16 in 2007, and $3.65 in 2008.

Shares of Genzyme dropped 29 cents to $68.33 and AnorMed shares fell 39 cents, or 2.8 percent, to $13.41 in morning trading on the Nasdaq.