Czech generics drugmaker Zentiva, the subject of a takeover bid from Sanofi-Aventis, has rejected an earlier offer for the firm made by financial group PPF saying that it failed to reflect the company’s “underlying value and future prospects”.

Last week, PPF, which in tandem with Italian insurance group Generali current has a 19.2% holding in Zentiva, put in an offer for the Prague-headquartered firm of 950 crowns per share, valuing it at around $2.3 billion. However, the company’s board said that having received “extensive legal and financial advice”, notably from Merrill Lynch, it has reached the conclusion that the offer is not in the best interests of Zentiva, its shareholders and all its other stakeholders.

Furthermore, Zentiva says that the PFF offer is “opportunistic in its timing” coming at a time when its recent share price has been somewhat in the doldrums. However, the firm says that “it is in the process of rebuilding investor confidence” and revenues this year are expected to increase around 20%.

Zentiva also claimed that the PPF offer is “inadequate in light of other non-financial considerations” and the financial group’s intentions, should it acquire control, are “vague and inconclusive”. It does not present “any tangible benefits for other stakeholders of Zentiva, including employees, customers, and business partners”, the board added.

Tight-lipped over Sanofi bid
However Zentiva is saying nothing about the offer that was made by Sanofi last week of 1,050 crowns per share. The Czech firm, in which the French drugmaker already has a 24.9% stake, merely noted the announcement by Sanofi of its intention to make a competing offer, adding that members of the board affiliated with the latter did not participate in the discussions regarding PPF.

Zentiva concluded by saying it is “well placed to participate in the further expected industry consolidation” and shareholders could “miss out on participating in the benefits of a synergistic transaction” or from receiving a healthy premium if a sale takes place. It added that the outlook for the generics market is robust, “with strong growth forecast in the central eastern European markets in which Zentiva operates.”