US biotechnology company Genzyme Corp and French drugmaker Sanofi Aventis are moving closer in their discussions about a possible acquisition, according to sources familiar with the situation.

Sanofi has offered to acquire Genzyme, a maker of drugs for rare diseases, for $18.5 billion, or $69 a share - a figure Genzyme says is too low.

According to two sources, no hard number has been placed on the table, but one source said advisers to the firm have bandied around figures in a broad $80 a share range, which would include a contingent value right (CVR) - a tradeable instrument that would give Genzyme shareholders an additional benefit if the company reaches certain milestones.

Still, it is unclear how meaningful any figure under discussion is since no agreement has been reached on what portion of it would come in the form of a CVR and how much in cash.

The value of a CVR would be discounted by investors based on their assumptions of whether Genzyme could reach its milestones. The real value of any transaction could be much lower than $80 a share.

Those milestones would most likely be tied to its experimental drug, alemtuzumab, for multiple sclerosis. Genzyme has said it expects to generate peak sales from the drug of $3.5 billion - a much higher figure than most analysts are estimating, and higher than the $700 million or so estimated by Sanofi.

Five out of six Genzyme investors questioned by Reuters said they would prefer a higher cash payment, with only a small portion coming in the form of a CVR.

According to one source, Sanofi would be willing to increase its offer by a nominal amount and include a CVR in a final deal, though the company would be unlikely to strike a deal worth $80 a share.

Genzyme's shareholders have until January 21 to tender their shares to Sanofi, which has already extended its $69 a share offer once.-Reuters