Jan 8 2010
Genzyme
Corporation (NASDAQ: GENZ) and San-Diego based institutional
investor Relational Investors LLC announced today that they have entered
into a mutual cooperation agreement. Relational, a $6 billion private
investment fund, began investing in Genzyme shares in late 2008 and
currently owns approximately 4 percent of the company’s common stock.
“While these are difficult and challenging times for Genzyme, we are
confident its management is making significant improvements to drive
short- and long-term value for shareholders”
Over the past several months, Genzyme and Relational have been engaged
in constructive discussions related to various aspects of Genzyme's
business. In mid-December, Relational requested representation on
Genzyme’s board of directors. With the current progress the company has
made in overcoming manufacturing challenges, strengthening its operating
structure, and enhancing its board composition, Relational agreed to
defer its request and support the board’s nominees and proposals in
2010. Genzyme, as part of the agreement, will appoint Ralph Whitworth,
principal and co-founder of Relational, to the company’s board if
Relational requests representation in November 2010.
"While these are difficult and challenging times for Genzyme, we are
confident its management is making significant improvements to drive
short- and long-term value for shareholders,” said Ralph Whitworth,
principal and co-founder of Relational. “The management and board remain
open to ideas and are materially improving their manufacturing
operation, compensation program, capital allocation discipline, and
board composition.”
“This agreement is a strong vote of confidence from one of our largest
shareholders in the company’s progress and future direction,” said Henri
A. Termeer, Genzyme’s chairman and chief executive officer. “We are
gratified that Relational recognizes the board’s and management’s
aggressive actions to strengthen the company overall and return Genzyme
to its historical path of sustainable growth and shareholder value
creation.”
In December, Genzyme issued a letter to shareholders outlining the
meaningful progress the company has made in making organizational
changes and operational improvements that significantly reduce risk in
manufacturing operations. These and other initiatives detailed in the
letter are expected to allow Genzyme to emerge a stronger company.
“As active, long-term shareholders we are committed to ensuring that
this progress continues,” said Whitworth. “Our mutual cooperation
agreement allows us to give management and the board the support they
need to address near term challenges, while providing us the opportunity
for future board representation if circumstances warrant that level of
involvement."
The agreement is detailed in an exhibit to the Form 8-K that the company
filed today with the Securities and Exchange Commission.
http://www.genzyme.com/