Medivation hits back at Sanofi’s boardroom coup attempt
Sanofi has unveiled plans to replace the entire board of Medivation in order to push through its $9.3 billion takeover bid.
The Paris-headquartered pharma firm’s takeover bid first came to light on 29 April, but has been rejected by Medivation at least once, and now Sanofi wants to force its way in to gain control of the cancer specialist pharma company.
Sanofi is looking to give its revenues and pipeline a boost, and Medivation, with cancer blockbuster Xtandi and a promising oncology pipeline, is an attractive target.
Sanofi’s chief executive Olivier Brandicourt said Medivation’s refusal to engage had left it “with no choice” but to commence a ‘consent solicitation’ process, which would allow it to elect directors who are more open to considering its takeover bid.
The consent solicitation process involves Sanofi approaching shareholders directly, and must gain the permission of the majority of shareholders to replace the Medivation board, and has named eight of its own nominees to fill their shoes.
However it must receive clearance from US financial regulator the Securities and Exchange Commission (SEC) before it can make this approach.
The tactic is therefore far from certain to work, and Medivation has hit back, saying it will try to block the move.
Its board urged its stockholders to reject Sanofi’s attempted to oust its current members, which it says is “a tactic for Sanofi to facilitate its substantially inadequate and opportunistically-timed proposal to acquire Medivation.”
Medivation maintains that Sanofi’s bid substantially undervalues the company. Even though its offer was at a 50% premium to its share price before the bid went public, the firm’s share price has soared and Medivation has urged shareholders to oppose the bid.
David Hung, M.D., Founder, president and chief executive of Medivation, said its Board of Directors has overseen a strategy that has created a leading oncology franchise and a strong late stage pipeline.
He said the board had delivered total stockholder returns of more than 1,440% since 2009.
Kim Blickenstaff, chairman of Medivation’s Board of Directors, said, “Sanofi is seeking to take control of our Board in a clear attempt to circumvent objective deliberations over what course of action is in the best interests of all Medivation stockholders. The unattractive economics of Sanofi’s proposal – which the Board has already determined to be substantially inadequate – have not changed.
This could be a good time for any number of other potential suitors to make their move, with an offer that would substantially top Sanofi’s $9.3 billion bid. Among those understood to be interested in acquiring Medivation include Pfizer, Gilead and Celgene
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