Sanofi-Aventis chief Chris Viehbacher should avoid paying much more than about $70 per share, or a total of $19 billion, to land U.S. biotech group Genzyme, shareholders in the French group say.

Two shareholders told Reuters they would not be happy with the drugmaker paying much over $70 a share, or around $18.7 billion, while a third said he was concerned about some valuations being put on Genzyme, which run to over $80 a share.

Viehbacher, who took over 20 months ago, is shaking up the Paris-based firm by cutting costs and diversifying operations and buying Genzyme would be the biggest move he has made so far in his hunt to buy new sales to offset revenues lost as a result of patent expirations.

Sanofi has made a takeover proposal valued at $69 per share to Genzyme and the two sides are discussing the offer, sources familiar with the situation said on Monday.

Genzyme's share price, however, is already above this level -- it ended at $70.36 on Nasdaq on Monday and the stock added a further 1.4 percent in pre-market trade.

It has already shot up since Genzyme was mooted as potential prey in early July and jumping 15 percent to over $62 on July 23 after sources told Reuters and other media the two were in talks.

A spokesman for Sanofi, whose shares were barely changed at 45.45 euros by 1253 GMT (8:53 a.m. EDT), declined to make any comment on Tuesday.

France's AMF financial regulator said Sanofi was not obliged to make any comment on rumors about Genzyme under French rules as the target is based abroad.

In this case, it is the law of the country in which the target company is based that applies, an AMF spokeswoman said.

BENEFIT OF THE DOUBT

One top-15 shareholder in Sanofi acknowledged Viehbacher would probably have to raise his opening offer, but only a little bit.

I would give him the benefit of the doubt that he will be reasonable, disciplined with the price, the shareholder said.

Common sense dictates that Genzyme would fit Sanofi. It would make sense for Sanofi to buy them but whether they can agree on a price is a totally different story.

A source familiar with the situation said on Monday that Genzyme was unlikely to accept a deal at under $80 a share..

But a second top-30 Sanofi shareholder said a deal would be difficult if the price went much above $70.

If I look at Genzyme, they could make this value-neutral and look attractive at this level, around $70 a share. If you go much higher, that would make it a very tough call. We would need to see a lot of cost-cutting and incremental synergies to work, he said.

Any price much higher than this? I do not think the shareholders would like that.

Many analysts think a deal will end up being done in the mid-$70s per share, assuming no counter-bidder emerges.

Citigroup analysts said in a research report that Sanofi was likely to be the only buyer and end up paying $74 to $77.

GlaxoSmithKline, Johnson & Johnson and Pfizer have all been mentioned as potential interlopers but industry experts think a white knight may be elusive.

Key activist shareholders Relational Investors and Carl Icahn hold 3.8 percent and 4.9 percent of Genzyme, respectively.

(Additional reporting by Caroline Jacobs and James Regan in Paris; Writing by Ben Hirschler and Douwe Miedema; Editing by Greg Mahlich)

Carl icahn Glaxosmithkline Pfizer