Sanofi Urges Medivation to Join Talks on $9.3 Billion Offer

  • French drugmaker says it has support from Medivation investors
  • Takeover bid could be revised if talks proceed, Sanofi says

Sanofi urged Medivation Inc. to engage in negotiations regarding its unsolicited $9.3 billion takeover offer, threatening to go directly to shareholders if talks don’t begin.

Medivation’s top shareholders have signaled “overwhelming support” for a transaction, Paris-based Sanofi said in a letter to Medivation’s board made public in a statement Thursday. The French drugmaker said it would consider revising its offer -- which Medivation rejected last week -- if the board engages in discussions.

“You should know that an acquisition of Medivation is a priority for Sanofi and we are committed to effecting it,” Sanofi Chief Executive Officer Olivier Brandicourt said in the letter. “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.”

The letter escalates the tension after Medivation spurned Sanofi’s $52.50-a-share proposal Friday, saying it would deny its stockholders the value of future products. The San Francisco-based company has one marketed medicine for prostate cancer, Xtandi, and is developing other oncology treatments.

Shares of Medivation, which have been trading higher than Sanofi’s offer as investors anticipate counter-bids, rose 0.5 percent to $59.35 at 10:55 a.m. in New York. The stock traded at an average of about $35 in February and March, before reports Sanofi was interested in the company.

Medivation would be trading in the $30s if Sanofi hadn’t offered to buy the company, Brandicourt said in his letter. That means the proposed takeover price gives investors an almost 100 percent premium, he said.

Sanofi rose 1.2 percent to 70.94 euros in Paris trading.

Counteroffers?

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.

Amgen Inc. is considering a bid for Medivation Inc., people with knowledge of the matter said Thursday, joining a group of suitors circling the company. Among them are AstraZeneca Plc, Pfizer Inc. and Novartis AG, people familiar with the matter said last week. The deliberations are at an early stage and the companies may decide against making offers, they said.

Sanofi took its offer public a week ago 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.

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