S&P Downgrades Genzyme (GENZ) to Hold from Buy.

S&P entered into the Sanofi-Aventis (NYSE: SYN) – Genzyme (NASDAQ: GENZ) merger fray by downgrading shares of Genzyme, yesterday to Hold from Buy. S&P think the deal will get done at a higher price than the $69 a share, Sanofi has offered to purchase Genzyme. But after Genzyme’s 38% stock rise since July, they probably think that buying new shares is risky. They kept their target price at $72.

Here are some quotes from the report:

“Sanofi-Aventis announces a non-binding offer to acquire GENZ for $69 per share, equal to an aggregate all cash price of $18.5B. Matching an earlier non-public bid, we see today's offer designed to induce formal talks with GENZ, and possibly set the stage for a hostile offer for GENZ shares at or above $69 (representing a 38% premium to GENZ's stock price before merger speculation surfaced in late July). Although GENZ has rejected the offer as inadequate, we believe a deal is likely to materialize at a sweetened price. We are keeping our target price of $72./S. Silver, H. Saftlas”