Sanofi threatens Medivation board with hostile bid
- Sanofi is threatening cancer company Medivation with a hostile bid, days after Medivation's board emphatically rejected Sanofi's original $9.3 billion purchase offer, according to a letter released by Sanofi Thursday.
- Sent by Sanofi CEO Olivier Brandicourt to Medivation's board, the letter indicated Sanofi would attempt to remove and replace members of the board if Medivation continues to rebuff takeover discussions.
- Sanofi said its proposal had "overwhelming support" from Medivation shareholders and suggested it would be willing to raise its offer if the company took part in good faith discussions.
The battle for Medivation is only just beginning to heat up.
Sanofi went public last week with its $9.3 billion offer after Medivation did not respond to initial proposals and requests for discussions on an acquisition. Medivation's CEO David Hung and its board of directors rejected that offer out of hand, saying the proposal was "opportunistically timed" and "substantially inadequate."
The proposal from Sanofi offered a $52.50 price per share, which Sanofi says represents a 50% premium to average market prices before takeover rumors boosted the stock. Medivation stock now trades near $60.
While Sanofi indicated it would be willing to raise its offer if Medivation engaged in negotiations, the company appears ready to go hostile. "If the Medivation Board of Directors continues to refuse to engage with us, then we intend to commence a process to remove and replace members of the Board," said Sanofi CEO Brandicourt in the letter.
Other big pharma companies are reportedly interested in Medivation as well. According to a report from Reuters, Pfizer has approached Medivation to discuss a possible acquisition. But no offer has been made and Pfizer could still back off. AstraZeneca may also be looking into making a bid.
Interest in Medivation has been sparked by the success of the prostate cancer drug Xtandi, which Medivation co-markets with Astellas. Xtandi pulled in $1.9 billion in global sales last year.
Medivation will report first quarter results after markets close Thursday, giving more detail on Xtandi's growth and possibly addressing the takeover offer from Sanofi.
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