An Auction Process Could Be on Medivation's Horizon
Medivation (MDVN) has agreed to sit down with potential bidders more than two months after Sanofi (SNY) - Get Report made its initial $9.3 billion offer for the biopharmaceutical company.
Medivation, which is based in San Francisco, announced July 5 after market's close that it has entered into confidentiality agreements with Sanofi and others to explore a potential sale of the company.
These agreements allow interested parties access to otherwise confidential information. Reuters has reported that Celgene (CELG) - Get Report and Pfizer (PFE) - Get Report have also entered into confidentiality agreements with Medivation, however neither company could be reached for comment.
"Our decision to enter into these agreements is consistent with our focus on stockholder interests, and will allow interested parties to fully understand the significant value of our XTANDI franchise and the enormous potential of our pipeline, including talazoparib, our promising, potential best-in-class PARP inhibitor," Kim Blickenstaff, chair of Medivation's board of directors said in a press release.
Evidently Sanofi is happy to begin working on a deal. "We are pleased to have the opportunity to engage with Medivation," said Olivier Brandicourt, CEO at Sanofi, in a press release. "Our willingness to increase our offer is driven by our in-depth analysis of the benefits and value creation potential of a combination."
This positivity comes after more than two months of Sanofi's takeover attempts being publicly rebuffed by Medivation.
The initial offer for Medivation was made public by Sanofi on April 28, when the company published a letter signed by Brandicourt, which urged a meeting between the companies' CEOs. The offer outlined in the letter was worth $52.50 per share.
On May 25, Sanofi proposed a replacement board of directors for Medivation, finally drawing a reaction from the company. Medivation responded on May 27 to the hostile takeover bid, calling the deal a "devil's bargain," and filed a consent revocation statement just two days prior calling Sanofi's proposed board of directors incompetent.
Medivation's shareholders would have voted on whether to replace the board on August 2 at an annual meeting. Glass Lewis & Co. advised shareholders to vote in support of Medivation.
However, the vote will no longer take place given Tuesday's news that Sanofi must terminate its consent solicitation in signing the confidentiality agreement.
Before entering into the confidentiality agreement, Medivation received yet another bid from Sanofi, offering up $58 per share in cash plus a contingent value right for sales of its drug, talazoparib, which represents a maximum of $3 per share by 2020.
The total value of Sanofi's new bid was worth $9.57 billion based on 165.01 million shares of Medivation outstanding. Medivation's board also declined this offer.
Evercore and J.P. Morgan are acting as financial advisers to Medivation on the deal, while Wachtell, Lipton, Rosen & Katz and Cooleyare acting as legal counsel.
Medivation, which has a market cap of $10.19 billion, was trading up 0.71% after hours, hitting $61.76 per share.
Medivation declined further comment on the deal. Sanofi could not be reached for comment.
This article originally appeared in The Deal, a sister publication of TheStreet.com focused on deals and dealmakers, on July 5. For more information about The Deal click here.