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BOSTON/PHILADELPHIA (Reuters) – Sanofi-Aventis SA plans to move discussions this hebdomad with takeover direct Genzyme Corp, aiming to finalize a care worth more than $19 1000000000 in the incoming some days, sources old with the position said on Sunday.

The boards of both companies were scheduled to stop separate meetings on Sun to discuss the position of a potential deal, but no test selection was probable to be made, said the sources, who declined to be titled because the talks were not public.

French drugmaker Sanofi is ease conducting cod diligence on Genzyme's business records and manufacturing operations, and discussions between the sides could waffle into the week, sources said.

An agreement would come nearly figure months after Sanofi prototypal put the intent to the U.S. biotech group.

Buying Genzyme module provide Sanofi a newborn Atlantic for ontogeny in the high-margin business of thin diseases as it seeks to attain up for papers losses that module verify discover roughly a ordinal of its 2008 income humble until 2013.

A care is probable to be priced at roughly $74 per care in cash, or $19.2 billion, supported on Genzyme's outstanding shares of 258.99 meg as of Oct 29, nonnegative a contingent continuance right, or CVR, with an inbuilt continuance of $5 to $6 a share, the sources said.

The CVR is a tradable instrument, which promises a payout to shareholders over time, supported on the action of Genzyme's empiric take Lemtrada for multiple sclerosis. The take is already oversubscribed low the sort study Campath for leukemia.

The minimal continuance of the CVR is cod to be between $12 and $15 a share, to be paying discover over heptad or octad years, assuming Lemtrada fulfills Genzyme's highest income projections, according to digit source.

That minimal CVR continuance is above what Wall Street had been expecting, said Mark Schoenebaum, an shrink at ISI Group.

"We venture the mart module deeply reduction the vehicle," Schoenebaum said. "Our back-of-the-envelope calculations suggest that a $13.50 CVR that pays discover over 7.5 eld strength modify at around $3 a care today. This assumes a 10 proportionality reduction evaluate and 40 proportionality quantity adjustment."

Since many Genzyme shareholders are short-term investors, the CVR could modify fireman to $2 a share, according to digit source. In that case, the care would provide Genzyme a tradable continuance of most $19.68 billion.

A BETTER DEAL

Sanofi Chief Executive Chris Viehbacher prototypal told Genzyme CEO Henri Termeer he was fascinated in a care on May 23 last year. He took an initial bid of $69 a care direct to Genzyme shareholders in October. But the two companies hit entered direct negotiations on a higher toll in past weeks.

"A $74 modify care makes business and strategic significance for Sanofi. It removes a material overhang and gives a denture over the papers cliff they face," said Marc Booty, a money trainer at Pictet.

Genzyme's hit traded at most $50 as fresh as July, 2010. The hit closed Friday at $73.40.

"A toll of meet beneath $80 is not intense at all, specially because there are no another buyers," said Lionel Melka, co-manager of Bernheim, Dreyfus & Co's Diva Synergy Fund in Paris.

"A care module modify Sanofi's profile; as soon as they hit Genzyme it becomes a ontogeny story. Investors bought the hit for its dividend not because of ontogeny prospects," Melka said.

CONFIDENTIALITY PACT

A Sanofi spokesman said on Sun that the land drugmaker was continuing to analyse Genzyme's business and declined to feature when a care strength be concluded.

"As we hit already indicated, we hit signed a confidentiality agreement with Genzyme and we are ease looking at non-public information. We hit no boost comment," he said.

Sanofi is cod to release its full-year business results on weekday and a care could be declared before then, sources said. The timing of the care announcement is not interdependent on the earnings date, however, digit maker cautioned.

The management and advisers for the two companies hit been discussing a potential deal, including a CVR, for individual weeks, trying to denture a panoramic gap in their expectations for Lemtrada. Genzyme has prognosticate extreme annual income of $3.5 billion, patch Sanofi, using the average of individual shrink estimates, expects only most $700 million.

Helvea shrink Karl-Heinz Koch said a CVR was a sharp way for Sanofi to care with the unknowns surrounding Lemtrada.

"They are not paying upfront for a lot of uncertainty -- that's important," he said. "At $74 nonnegative a CVR, the care cost would be within think ... The earnings leverage to Sanofi is substantial. They crapper extract a pair of billions in profit by integrating Genzyme."

Credit Suisse and nihilist Sachs are advising Genzyme. JPMorgan, Evercore Partners and moneyman Stanley are advising Sanofi.

(Additional news by Caroline Jacobs, Noelle Mennella and Ben Hirschler; Editing by king author and Gunna Dickson)

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