Sanofi SA (ADR) (NYSE:SNY) has made public its intention of acquiring Medivation Inc (NASDAQ:MDVN), having tabled a $9.3 billion takeover bid. The $52.50 a share offer represents a 50% premium to Medivation average share price for the past two months. The French drug maker is looking to use the acquisition to bolster its cancer treatment business.
Sanofi says its non-binding offer is not contingent to any financing conditions. Going public on the offer could be an indication that things are about to turn hostile, given that San Francisco-based group has failed to respond to earlier advances.
Sanofi SA (ADR) (NYSE:SNY) CEO, Olivier Brandicourt in a letter to his counterpart at Medivation reiterates why the two companies need to merge. However, it appears Medivation is not in interested in the transaction having failed to respond to three calls asking it to come to the negotiation table.
“We do not understand the delay in responding to our letter. The price we put forth represents a very substantial premium, and it would be all cash without any financing condition,” said Mr. Brandicourt.
Hung says a board meeting on April 3 concluded that it was not the right time to enter into negotiations. According to reports, Medivation has refused to enter any negotiations on concerns that Sanofi offer is too low.
Bidding War
Medivation Inc (NASDAQ:MDVN) could show interest on Sanofi SA (ADR) (NYSE:SNY) tabling a much higher offer. People familiar with the matter say the company hired defense advisers after receiving the first preliminary interest, an indication it is waiting for a bidding war.
Roche Holding G and AstraZeneca plc (ADR) (NYSE:AZN) are some of the companies that could look to acquire the biotech company as they are also looking for ways to expand their oncology portfolios.
Sanofi urgently needs new medicines to offset potential loss of revenue as its Lantus insulin drug ages. Its new cholesterol drug is also facing a patent battle, which could leave it exposed to stiff competition.
Medivation Inc (NASDAQ:MDVN) is currently developing an Immuno-oncology drug that it intends to use to treat blood cancers such as large b-cell lymphoma. The company is also working on a drug for the treatment of breast cancer. Gaining access to such drugs could help Sanofi SA (ADR) (NYSE:SNY) bolster its portfolio of drugs.