Medivation Inc (NASDAQ:MDVN) announced that independent proxy advisory firm Glass, Lewis & Co., LLC (“Glass Lewis”) recommends that Medivation’s stockholders support the Company’s Board of Directors by rejecting Sanofi’s solicitation efforts.
Commenting on the Glass Lewis report, Medivation stated: “We are pleased with Glass Lewis’ report, which underscores our belief that Sanofi’s opportunistic proposal grossly undervalues Medivation. The members of our highly qualified Board of Directors, who have a proven track record of delivering value, remain committed to acting in the best interests of our stockholders. We encourage our stockholders to follow Glass Lewis’ recommendation to support our Directors by marking and returning the company’s green consent revocation card.”
In making its recommendation, Glass Lewis notes the following*:
|On Medivation’s Board of Directors|
- “…the Company’s board currently comprises a fairly reasonable mix of longstanding experience and fresh perspectives. Additionally, several of the Incumbent Directors appear to us to have a good amount of experience in reviewing and signing off on premium merger transactions at other firms where they have held directorships.”
On Sanofi’s $52.50 Proposal
- “At this point, it appears to us that investors generally agree with the Company’s board that the Initial Sanofi Proposal undervalues the Company, as evidenced by the fact that the Company’s shares have traded well above Sanofi’s offer price of $52.50 per Medivation share ever since the initial announcement of such proposal. We also believe that the Company is not in any sort of significant dire financial straits at this time that would warrant accepting a low-ball takeover offer.”
- “…we believe that the Company’s shareholders should continue supporting the current Medivation board at this time. In our view, Sanofi’s proposed shakeup to the Company’s board composition would likely be more disruptive than beneficial to the Company’s shareholders.”
On Sanofi’s Nominees
- “Notwithstanding the fact that the Dissident Nominees are not employed by Sanofi, we believe that the Dissident Nominees, if duly elected as part of the consent solicitation process, would almost assuredly try to push through a takeover offer from Sanofi onto the Company’s shareholders.”
On Sanofi’s Tactics
- “Our concerns regarding the timing of the Initial Sanofi Proposal are further bolstered by the manner in which Sanofi presented its proposal. Specifically, in mid-April 2016, Sanofi privately submitted the Initial Sanofi Proposal on an unsolicited basis. In response, the Company notified Sanofi that the Medivation board would review and respond to the proposal in due course. We find no evidence to suggest that the Company was not earnestly considering the Initial Sanofi Proposal during that time, as the Company had retained a second financial adviser and had scheduled two special board meetings to review the offer. However, a little less than two weeks later, and just before the Company could wrap up its review of the Initial Sanofi Proposal, Sanofi decided to take its offer public. This suggests to us that Sanofi is likely more interested in pressuring the Company into a sale transaction with Sanofi rather than affording sufficient time to allow the Company to conduct a full review.”
- “We suspect that Sanofi’s primary motivation for pursuing the consent solicitation here is to pressure the Company to accept the Initial Sanofi Proposal or some other offer by Sanofi…” (Original Source)
Shares of Medivation are down nearly 3% to $57.60 in pre-market trading. MDVN has a 1-year high of $62.94 and a 1-year low of $26.41. The stock’s 50-day moving average is $60.41 and its 200-day moving average is $46.03.
On the ratings front, Medivation has been the subject of a number of recent research reports. In a report issued on June 16, Barclays analyst Geoff Meacham maintained a Buy rating on MDVN, with a price target of $70, which represents a potential upside of 18.1% from where the stock is currently trading. Separately, on June 7, Credit Suisse’s Kennen MacKay maintained a Buy rating on the stock and has a price target of $63.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Geoff Meacham and Kennen MacKay have a total average return of 14.4% and 1.5% respectively. Meacham has a success rate of 55.0% and is ranked #283 out of 3980 analysts, while MacKay has a success rate of 31.9% and is ranked #1728.
The street is mostly Bullish on MDVN stock. Out of 17 analysts who cover the stock, 11 suggest a Buy rating and 6 recommend to Hold the stock. The 12-month average price target assigned to the stock is $55.00, which represents a potential downside of 7.2% from where the stock is currently trading.
Medivation, Inc. is a biopharmaceutical company, which is focused on the rapid development and commercialization of novel therapies to treat serious diseases for which there are limited treatment options.