SCO Capital to vote against Genzyme acquisition of Bioenvision, plans to nominate new board members

By Lisa Kerner

Charlotte, N.C., Oct. 1 - Bioenvision, Inc. shareholder SCO Capital Partners LLC reiterated its plan to vote against the company's merger with Genzyme Corp. in yet another letter to Bioenvision's board of directors.

"As stated in numerous letters to the board, the $5.60 offer is extremely inadequate and the result of a poorly managed and ill-timed sales process. In the alternative, SCO believes that the Bioenvision board of directors should be working on behalf of the common shareholders, like SCO, to maximize value over the near term," the Oct. 1 letter said.

SCO does not believe Bioenvision shareholders will approve the merger on Oct. 4 following the "tender offer failure."

The investor cited supporting views by three separate proxy advisory and shareholders services firms: Institutional Shareholder Services, Inc., Glass Lewis & Co., and Egan-Jones.

In addition, SCO said it plans to propose a new slate of directors for the next annual shareholder's meeting and believes clofarabine will be approved in the European Union for the treatment of adult acute myelogenous leukemia in 2008.

"We believe Bioenvision will be well positioned, within a 3 to 6 month timeframe, to engage an independent investment bank to do a well-run process to market the company to possible acquirers, and that there will be considerable interest in clofarabine," the letter, signed by SCO's Steven H. Rouhandeh, stated.

SCO's last letter to Bioenvision - its seventh - in opposition to the Genzyme merger was sent to board members on Sept. 12.

It was previously reported that SCO's slate of board nominees is expected to include SCO's Rouhandeh and former Bioenvision director Jeffrey Davis as replacements for Michael Kaufman and Joseph Cooper. The investor also plans to re-nominate Christopher Wood and Scott Nelson "for continuity purposes" in addition to at least one new independent director.

SCO had also suggested that Bioenvision augment key management positions and terminate the Genzyme sub-license for clofarabine in North America as part of its plan to unlock value for the company. The investor said it believes the sale of Bioenvision in 2008 at an offer price in excess of $10 per share is possible. At that time, SCO owned 7,209,331 shares, or 13.1% of Bioenvision's stock.

Genzyme's proposed acquisition of Bioenvision is valued at about $345 million and had been expected to close in July. The deal would give Genzyme exclusive, worldwide rights to clofarabine, which was co-developed by Bioenvision and Genzyme for the treatment of acute lymphoblastic leukemia.

Bioenvision is a New York biopharmaceutical company, and Genzyme is a Cambridge, Mass.-based biotechnology company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.