BioCentury
ARTICLE | Company News

Genzyme General Corp., Genzyme Biosurgery Inc. biopharmaceuticals news

June 9, 2003 7:00 AM UTC

GZBX shareholders Rory Riggs and John Lewis filed suit in the U.S. District Court for the Southern District of New York seeking to block the sale of GZBX stock to GENZ. The shareholders said the sale of the biosurgery company at $1.77 a share, which values GZBX at $72 million, would be a 95% discount to GZBX's fair market value which they put at $1.5 -$2 billion. GENZ said the suit is without merit.

Riggs is the former president of Biomatrix, which was one of three companies that merged in 2000 to form GZBX. Lewis is president of Gardner Lewis Asset Management. Combined, the two own 6.4 million GZBX shares, which is 15.6% of GZBX's shares outstanding. The suit alleges that in connection with the 2000 merger, GENZ senior management falsely committed to maintain a tracking stock structure that would "protect the holders' interest in the value of Biomatrix's assets." In addition, the suit allege that GENZ "intentionally mismanaged" GZBX to manipulate its tracking stock and chose a valuation period for the exchange ratio when GZBX's shares were at a "historical low." ...