French drugs company Sanofi (SNY) - Get Report today went hostile with its $9.3 billion bid for U.S.-based Medivation (MDVN) , proposing a vote to replace the entire board of the Nasdaq-listed biotech after they refused to enter talks.
"Despite multiple attempts, both prior to and following the public disclosure of Sanofi's proposal, Medivation has thus far refused to engage with us regarding the merits of a value creating transaction," Sanofi's CEO Olivier Brandicourt said in a statement. "This has left us with no choice but to commence a process to elect directors who are more open to supporting the best interests of Medivation shareholders regarding a potential transaction."
In addition to threatening to oust the board Brandicourt also offered to increase his bid if the target entered talks. "We have been very clear that if you engage and provide information, we would be in a position to increase our offer and I am confident that we will be able to offer significant additional value," he wrote in a letter dated May 25 and addressed to the Medivation board.
The French bidder's move is not unexpected. Brandicourt earlier this month warned in a letter to Medivation that he would take his offer directly to the San Francisco-based group's shareholders if the target's management continued to refuse to discuss his non-binding offer of $52.50 per share. Medivation, led by CEO David T. Hung, rejected the offer on April 29, claiming that it substantially undervalued the company.
Shares in Medivation traded early Wednesday at $62.03, up $0.12 on their Tuesday close. The company is widely expected to attract bids from Sanofi's rivals.
Sanofi said Wednesday it had filed preliminary consent solicitation materials with the U.S. Securities and Exchange Commission seeking to remove and replace Medivation's board with eight independent candidates willing to "fully and fairly evaluate all of Medivation's strategic options."
Paris-based Sanofi's candidates for the Medivation board include an eclectic mix of financiers, lawyers and former drugs and medical company executives.
Medivation urged its shareholders to reject the attempt to overthrow its board and said it would file consent revocation papers with the SEC seeking to block the move.
"Sanofi has no duty to act in the best interests of Medivation or its stockholders," said Hung in a statement. "Its proposal to replace our existing directors with its own hand-picked nominees is simply a tactical maneuver to facilitate a transaction that will transfer value that rightly belongs to Medivation stockholders to Sanofi."
Shares in Sanofi traded Wednesday at €73.46 ($81.88), up €1.66 or 2.3% on their Tuesday close.