Sanofi Makes Offer for Medivation in $9.3 Billion Deal -- 2nd Update
April 28 2016 - 6:52AM
Dow Jones News
By Nick Kostov
PARIS-- Sanofi SA on Thursday said it has made an unsolicited
offer to acquire Medivation Inc. in a deal valued at $9.3 billion,
the French drugmaker's latest effort to expand its cancer-treatment
business.
Sanofi said it decided to go public with its offer after the
U.S. company rebuffed its recent takeover approach.
In a letter dated April 28, Sanofi's CEO Olivier Brandicourt
said he first discussed a possible takeover in a phone call with
the San Francisco-based firm's CEO David Hung on March 25 and in a
subsequent conversation on April 3.
Medivation expressed "no interest in discussing a transaction,"
said Sanofi.
"Given your unwillingness to meet or to hear our proposal, we
sent you a letter on Friday, April 15, setting forth a proposal to
acquire Medivation," Mr. Brandicourt wrote.
"We do not understand the delay in responding to our letter," he
added.
Mr. Brandicourt said the $52.50 a share offer--a 50% premium to
Medivation's average share price for the two months before takeover
speculation emerged--was "very attractive."
The Paris-based drugmaker said its nonbinding, all-cash offer
wouldn't be contingent on any financing conditions.
Sanofi is under pressure to launch new innovative medicines to
make up for declining revenue in its all-important diabetes market
after its blockbuster Lantus insulin went off patent in the
U.S.
A possible takeover of the U.S. biotech firm could help the
French drugmaker expand its new products portfolio and build a
competitive position in a hotly tipped market where it is still a
small player.
Medivation, a Nasdaq-listed company that focuses on hard to
treat cancers, markets one prostate cancer therapy, called Xtandi,
and has two additional oncology assets in clinical development.
But Medivation could draw interest from other companies.
Sanofi rivals such as Roche Holding AG and AstraZeneca PLC have
also been expanding their oncology portfolios and developing
immuno-oncology treatments that harness patients own immune systems
to fight cancer.
An AstraZeneca spokesman declined to comment. Roche couldn't
immediately be reached for comment.
The company's valuation is also very attractive. Medivation
shares have taken a pummeling in the past year, falling from an
all-time high of $66.03 in May to just $27.32 on February 8. That
decline was partly due to a broader rout in the biotech sector,
spurred by worries about the sustainability of high drug prices,
and deepened by a setback to one of its key pipeline drugs.
A spokeswoman for Medivation didn't immediately respond to a
request for comment. Sanofi shares were down 1.9% at EUR75.54
($85.8) in midday trading on Thursday.
Denise Roland also contributed to this article.
Write to Nick Kostov at Nick.Kostov@wsj.com and Noemie Bisserbe
at noemie.bisserbe@wsj.com
(END) Dow Jones Newswires
April 28, 2016 06:37 ET (10:37 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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