SCO calls on Bioenvision to abandon sale to Genzyme

New York, July 3 - Bioenvision, Inc. shareholder SCO Capital Partners LLC called on the company to abandon its proposed sale to Genzyme Corp. after Genzyme's tender for the company failed.

Noting Genzyme's reported 24.3% stake on May 29, SCO said the other shareholders have rejected Genzyme's tender for Bioenvision "by a majority of greater than 74% to 2%."

"The $5.60 price is an unacceptably low offer," SCO's Steven Rouhandeh said in a letter to Bioenvision's board that was filed with the Securities and Exchange Commission.

He said it was just a 6% premium to the prior day's closing, and a discount of 8%, 16% and 44% to the stock price of one, two and three years previously.

"Genzyme's offer was made off an artificially low market price, negatively impacted by an ill-timed, dilutive financing at a price near the four-year low," SCO continued.

Meanwhile comparable transactions for other companies have had premiums of 50% to 100%.

SCO added: "Bioenvision's board of directors should heed the message in the overwhelming failure of the tender offer, and work with Genzyme to terminate this ill-timed transaction, or to achieve a price level acceptable to the common shareholders."

SCO owns 7,209,331 shares of Bioenvision, or 13.4%.

Bioenvision's proposed acquisition by Genzyme was 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.

Both companies' boards approved the deal. Bioenvision executive officers, directors and shareholders holding approximately 20% of the company's shares have entered into agreements in support of the transaction, the companies previously said.

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

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