Medivation Enters Talks With Sanofi, Others After Raised Bid

  • U.S. company rejected higher bid from France’s Sanofi
  • Sanofi agreed to drop consent solicitation in negotiations

Medivation Inc. entered into confidentiality agreements with French drugmaker Sanofi and other parties that have expressed interest in a deal with the U.S. biotechnology company, after earlier rejecting a raised bid from Sanofi.

The companies announced the agreement in separate statements on Tuesday, bringing to an end Sanofi’s hostile efforts and turning them into more cordial negotiations. The raised, rejected offer valued Medivation at $58 a share, plus a contingent value right valued at a maximum of $3 a share, Medivation said in its statement.

As part of negotiations, Sanofi has agreed to drop its attempt to have Medivation shareholders oust the board. Sanofi filed a preliminary consent solicitation form -- the document sent to Medivation shareholders outlining its case -- last month, after Medivation rejected its initial $9.3 billion unsolicited proposal, or $52.50 a share, in April.

Benefits Analysis

Sanofi shares showed little change, trading at 74.38 euros, at 9:10 a.m. in Paris trading on Wednesday. Medivation shares gained 1.2 percent to $62.50 at 4:33 p.m. in extended trading in New York, after rising 2.7 percent in regular trading.

“Our willingness to increase our offer is driven by our in-depth analysis of the benefits and value creation potential of a combination,” Sanofi Chief Executive Officer Olivier Brandicourt said in the statement. Meetings with Medivation’s management will be scheduled soon, the company said.

Medivation, based in San Francisco, spent years as a penny stock before its fortunes were transformed on the back of prostate-cancer treatment Xtandi, which analysts project will generate $1.32 billion in sales by 2020. Sanofi needs new medicines to spur growth as its blockbuster insulin Lantus ages and a new cholesterol drug faces challenges in the U.S.

“Medivation has significant scarcity value as one of the only profitable, commercial-stage oncology companies,” Chairman Kim Blickenstaff said in his company’s statement. The agreements “will allow interested parties to fully understand the significant value of our Xtandi franchise and the enormous potential of our pipeline.”

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