Sanofi launches $9.3 billion fight for U.S. cancer firm Medivation

Fri Apr 29, 2016 4:52am EDT
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By Ben Hirschler and Leigh Thomas

LONDON/PARIS (Reuters) - French drugmaker Sanofi went public with a $9.3 billion offer to buy Medivation on Thursday, setting up what could be a lengthy takeover battle after the U.S. cancer firm rebuffed its approaches.

The decision to target Medivation marks a return to the biotech takeover trail for Sanofi, which is looking to new cancer treatments to bolster its portfolio and help offset declining sales of mainstay diabetes drug Lantus.

Sanofi's non-binding proposal is to buy Medivation for $52.50 per share in cash, representing a roughly 36 percent premium over Medivation's stock price one month prior to Thursday's offer.

It is, however, only modestly above Medivation's Wednesday closing price of $52.05 and investors signaled they expected Sanofi to dig deeper, with the shares trading above $56 on Thursday.

In 2015, the average offer price among life sciences deals was 40 percent above the target's stock price four weeks earlier, according to data from Thomson Reuters. Biotech deals saw even frothier premiums, typically around 50 percent.

Reuters reported last month that Medivation had been working with investment bank J.P. Morgan to handle interest from companies regarding a potential acquisition, but it had no plans to sell itself.

Bryan Garnier analyst Eric Le Berrigaud said Sanofi could now face a prolonged takeover fight with other players potentially getting involved, including Japan's Astellas Pharma, Medivation's partner on its prostate cancer drug Xtandi.

Britain's AstraZeneca has also been reported to have looked at Medivation.   Continued...

French multinational pharmaceutical company SANOFI logo seen at their headquater in Paris, France, March 8, 2016. REUTERS/Philippe Wojazer