The campaign has begun. Sanofi ($SNY) dispatched its ballots to Medivation ($MDVN) shareholders, arguing to replace the biotech’s board to clear the way for a buyout. And Medivation mailed its own letter arguing right back.
The two companies have been locked in a takeover fight since early this year, when Medivation first rejected the French drugmaker’s $52.50-per-share offer. As reports of Medivation talks with rival bidders surfaced, Sanofi ratcheted up the pressure by threatening to replace the smaller company’s board.
Now, the election process has begun, with Sanofi’s backing for 8 new directors on one side, and Medivation’s staunch resistance on the other.
Echoing previous statements, Sanofi CEO Olivier Brandicourt emphasized in his letter that his company is willing to raise its offer, provided Medivation sits down to talk. He contended that Medivation shareholders have told Sanofi they want the company to be included as Medivation weighs a sale.
“We have had extensive conversations with Medivation shareholders and believe that there is overwhelming support for Medivation to undertake a sale process that includes Sanofi,” Brandicourt said in a statement. “We urge all Medivation shareholders to support Sanofi’s efforts to elect directors that are committed to maximizing value.”
Meanwhile, Medivation filed its Consent Revocation Statement, required by the Securities & Exchange Commission as part of the consent solicitation process that Sanofi initiated. And it issued a letter, co-signed by CEO David Hung and Board Chair Kim Blickenstaff, to shareholders highlighting its successful prostate cancer drug Xtandi and its oncology pipeline, which could “create significant additional value” for any buyer.
The company also launched a website, MedivationForStockholders.com, to serve as a repository of its own information on the solicitation.
“We are on the cusp of creating significant additional value for our stockholders,” Medivation’s letter to shareholders stated, citing late-stage meds talzoparib and pidilizumab. “This is why we object so strongly to Sanofi’s attempt, through coercive tactics, to acquire Medivation at opportunistic, low prices.”
The biotech urged stockholders “to resist Sanofi’s attempt to capture for itself value that rightly belongs to you.”
Market watchers agree that buyers have plenty of room to pay more for Medivation, given Xtandi’s sales and the company’s pipeline prospects. But given the rush of interest, a deal may not come together very soon. RBC Capital Markets analyst Simos Simeonedis figures the contest will extend into 2017, with an auction eventually yielding a per-share price of $65 to $75, a recent investor report noted.
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Pictured are Medivation CEO David Hung, left, and Sanofi CEO Olivier Brandicourt.