Well, so much for my fantasy of Sanofi-Aventis walking away from their attempt to buy Genzyme. They went public yesterday with a $69/share offer - even lower than most people were thinking - and just a little while ago, Genzyme publicly turned them down.

What's more, this is apparently the same price at which Genzyme (privately) balked earlier in the summer. The big difference now, of course, is that the dollar figures are out in the newspapers. And the only reason to do it that way, at least as far as I can figure, is if you're going to try to wage a hearts-and-minds battle for Genzyme's shareholders: a hostile offer, or at least the credible threat of one.

I'm in no position to say how well that'll work out. Sanofi-Aventis has, presumably, been sounding out the larger institutional investors to see if they can get something going, while Genzyme has surely been telling them to stick with the current management for a better deal. The big issue is the uncertainty about when the company is going to get its manufacturing problems taken care of. No doubt that's going to be one of the selling points for a hostile bid: "Do you really want to stick with the people who let this happen? And do you really trust them to get it cleaned up when they say that they will?" But that same uncertainly clouds the pricing of the hostile offer itself. Thus. . .$69/share.

If I had to guess, I'd say that the two sides, after a lot of fist-waving, will reach some sort of face-saving figure in the mid-70s. Will the guy that sold all those October $75 calls make out or not?