Genzyme to Swap for Tracking Shares

Genzyme Corp.(GENZ) will bring in the tracking stocks it used to raise money for its cancer and biosurgery divisions, saying they've outlived their usefulness in a stalled market for new equity.

Genzyme will exchange shares in itself for shares of Genzyme Molecular Oncology(GZMO) and Genzyme Biosursurgery(GZBX) at a roughly 30% premium to recent market prices. The exchange ratio implies valuations that are well below both stocks' 52-week highs, however.

"While tracking stocks have enabled us to create tremendous value in the past, current financial market conditions have reduced their ability to raise needed capital," the parent company said in a statement.

Genzyme Corp. also reaffirmed 2003 earnings guidance of $1.25 to $1.35 a share, excluding amortization.

Genzyme closed Thursday at $39.13. Under the exchange formula, Genzyme Biosurgery shareholders get 0.04914 of a 20-day average price of Genzyme Corp. shares, or about $1.77 a share based on Thursday's close. The biosurgery shares closed Thursday at $2.51 and its 52-week high is $5.97.

Genzyme Molecular Oncology shareholders get 0.05653 of a 20-day average price of Genzyme Corp. shares, or about $2.03 a share. Oncology shares closed Thursday at $2.09 and its 52-week high is $4.53.

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