Dive Brief:
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Sanofi moved Wednesday to replace Medivation's entire board of directors, the latest action in an increasingly contentious takeover battle.
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The move to replace the eight board members with Sanofi's chosen candidates comes after Medivation turned down Sanofi's latest bid, a $52.50/share cash offer worth an estimated $9.3 billion.
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Medivation urged shareholders to reject the move.
Dive Insight:
“Despite multiple attempts, both prior to and following the public disclosure of Sanofi’s proposal, Medivation has thus far refused to engage with us regarding the merits of a value-creating transaction,” Dr. Olivier Brandicourt, Sanofi's CEO, said in a statement released by the company Wednesday. “Unfortunately, this has left us with no choice but to commence a process to elect directors who are more open to supporting the best interests of Medivation shareholders regarding a potential transaction.”
Sanofi is using a procedure known as a consent solicitation to attempt to replace Medivation's board. It would exercise a rule that allows Medivation shareholders to replace the board at any time.
The move comes as Medivation, which has a blockbuster in the prostate cancer drug Xtandi, apparently looks for other suitors. Reuters reported earlier this month that Medivation had signed agreements to share confidential information with Amgen, Pfizer and other potential acquiring companies -- but not Sanofi. That development was highlighted Wednesday in a letter from Sanofi to the Medivation directors.
"There have been published reports that you have signed confidentiality agreements with other parties. If that is accurate, we cannot see how you have not done so with us," Sanofi stated in the letter. "If you have not signed confidentially agreements with others as part of a sale process, then you are not doing what we are confident your shareholders want, which is for Medivation to undertake a sale of Medivation and to engage with Sanofi."
In the letter, Sanofi wrote that it also had sought a confidentiality agreement with Medivation, but had not received it. "We have been very clear that if you engage and provide information, we would be in a position to increase our offer and I am confident that we will be able to offer significant additional value. We believe that we are in a position to provide more value than any other party given the strategic importance of the transaction to us," the letter stated.
Medivation urged stockholders to reject the move. Dr. David Hung, Medivation's CEO and president, said in a statement that Medivation had delivered "total stockholder returns of more than 1,440% since 2009.
"In contrast, Sanofi has no duty to act in the best interests of Medivation or its stockholders. Its proposal to replace our existing directors with its own hand-picked nominees is simply a tactical maneuver to facilitate a transaction that will transfer value that rightly belongs to Medivation stockholders to Sanofi," he said.