Having knocked back one bid from a financial group, Czech generics drugmaker Zentiva has now told Sanofi-Aventis that its offer to acquire all of the firm is not enough.

Zentiva says that “after careful consideration”, including a consultation with Merrill Lynch, it is advising shareholders not to accept the French drugmaker’s offer of 1,050 Czech crowns per share, which values the firm at around $2.7 billion. The Prague-headquartered firm said that the Sanofi offer “fails to reflect the underlying value of Zentiva and its future prospects”.

The company claimed that it expects to deliver strong 2008 results, with revenues expected to increase around 20%. It also notes that the “outlook for the generics market is robust with strong growth forecast in the central eastern European markets in which Zentiva operates”.

Zentiva added that Sanofi’s offer comes at a time when its share price has been negatively impacted but “the challenges faced in the second half of 2007 have largely been addressed” and the firm “is in the process of rebuilding investor confidence”. The company claimed that it is “well placed to participate in further expected industry consolidation and shareholders could miss out on participating in the benefits of a synergistic transaction or from receiving a premium in a change of control transaction”.

Concluding its rejection, Zentiva said that “proper assessment of Sanofi’s intentions” and it does not “present obvious tangible benefits for other stakeholders” – the latter already has a 24.9% holding in the firm. It added that the Sanofi bid is subject to “several offer conditions, including competition law clearance, satisfaction of which is not guaranteed”.

Sanofi maintains that its valuation on Zentiva is a fair one and most industry observers feel that the company is unlikely to get involved in a bidding war. The French drugmaker’s offer came after financial group PPF, which in tandem with Italian insurance group Generali currently has a 19.2% holding in Zentiva, bid 950 crowns per share, which was rejected last month.