- Bid `substantially undervalues' Medivation, board says
- Sanofi remains committed to `compelling' combination
Medivation Inc. rejected an unsolicited $9.3 billion takeover offer from Sanofi, saying it “substantially undervalues” the U.S. drugmaker, which could force a higher offer or draw more bidders.
Sanofi’s proposal, at $52.50 a share, would deny stockholders the value of future products, Medivation said in a statement Friday. The San Francisco-based company has one marketed medicine for prostate cancer, Xtandi, and is developing other oncology treatments.
Medivation shares were trading at $56.05 at 11:11 a.m. in New York, down less than 1 percent, suggesting that investors believe the company might get a better offer.
Medivation Chief Executive Officer David Hung said the French drugmaker’s offer was “opportunistically-timed” and “designed to seize for Sanofi value that rightly belongs to our stockholders.” In a terse, three-sentence letter to Sanofi CEO Olivier Brandicourt, Hung said the board had unanimously rejected the bid “after careful consideration.”
Medivation specializes in therapies for hard-to-treat diseases, and larger companies’ need for new treatments has been spurring mergers and acquisitions this year. The company, which turned its first profit since 1999 just two years ago, was transformed on the back of a single blockbuster pill for prostate cancer, attracting Sanofi, which is seeking new medicines to spur growth as its blockbuster Lantus insulin ages and a new cholesterol drug faces a patent battle.
Sanofi took its offer public on Thursday after Medivation didn’t respond to an earlier approach and hired banks to defend itself. In a statement Friday, the French drugmaker said that combining the companies represents a “compelling strategic and financial opportunity” and that it remains committed to the transaction.
Sanofi fell as much as 6.5 percent in Paris, the biggest intraday decline in almost six months.
Among the reasons for rejecting the Sanofi bid, Medivation said it’s pursuing clinical development across three major subtypes of breast cancer and a new market opportunity for Xtandi. It cited two drugs in development, pidilizumab, an immuno-oncology drug, and talazoparib, for the treatment of breast cancer, has having great potential.
The offer is “designed to seize for Sanofi value that rightly belongs to our stockholders,” Medivation said in the statement.