Elliott Associates to vote against merger of Genzyme, Bioenvision

By Lisa Kerner

Charlotte, N.C., Sept. 6 - Bioenvision, Inc. shareholder Elliott Associates, LP, with a 6.7% stake in the company, believes the proposed sale to Genzyme Corp. for $5.60 per share "significantly undervalues Bioenvision" and, as a result, will not vote in favor of the deal.

Elliot Associates is not opposed to the sale of Bioenvision and believes that the company is a "strong complement" to Genzyme. The problem for Elliot Associates is the price.

"We believe this outcome was the result of a hurried and flawed sale process, apparent conflicts-of-interest on the part of the board, and a miscalculation by the company that shareholders would prefer a sale at any price rather than to wait for the significant value to which we are entitled," the investor said in a letter to Bioenvision's board. The letter was also included in a news release from the hedge fund.

Elliot Associates cited the company's substantial cash in the bank, a growing revenue stream, a highly promising product and "positive catalysts around the corner" as reasons Bioenvision's board should not rush a sale.

Bioenvision agreed on May 29 to be acquired by Genzyme in an all-cash transaction valued at $5.60 per outstanding common share and $11.20 per outstanding preferred share, or approximately $345 million.

It was previously reported that Genzyme expected to purchase some 22% of the outstanding shares of Bioenvision common stock, including the 100% of outstanding shares of preferred stock already tendered, in its tender offer ended July 10.

Bioenvision is a New York biopharmaceutical company.

Genzyme is a biotechnology company based in Cambridge, Mass.

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