Bioenvision investors to vote again
Genzyme Corp.'s effort to take over a key partner for $345 million took another twist this week.
After Genzyme narrowly lost a hotly contested shareholder vote last week to buy New York-based Bioenvision Inc., the two biotech companies have obtained a court order to reopen the polls this month to give shareholders yet another opportunity to approve the deal.
Genzyme, based in Cambridge, has already acquired 22 percent of Bioenvision's stock through a tender offer, and Bioenvision's board has voted to sell the rest of the company to Genzyme. But some shareholders, including Elliott Associates LP and SCO Capital Partners LLC, have complained that Genzyme's $5.60 per share offer is too low. Bioenvision shares were up 9 cents yesterday to close at $5.55, a 1.7 percent increase.
Bioenvision originally planned to complete the shareholder vote last Thursday. But after winning the support of only 47 percent of shares - 50 percent is needed for approval - it extended the voting until Friday morning. Despite rounding up some additional supporters, the merger vote still failed by 239,000 share votes, less than one-half of a percent of outstanding shares, according to court documents.
But Bioenvision says the deal would have passed by 2.8 million votes if it were allowed to include the votes of a JPMorgan client, who attempted to vote 43 minutes after Bioenvision's chief executive Christopher Wood closed the polls.
To give the stockholder another chance to vote, Bioenvision and Genzyme jointly asked a Delaware court judge for permission to reconvene the shareholder meeting Oct. 22. Bioenvision and Genzyme said the court granted their request yesterday.
One of the shareholders who opposed the deal, SCO president Jeffrey Davis, said he has never seen such extraordinary efforts to extend a shareholder vote.
"At some point, the board and management of Bioenvision should heed the wishes of the common shareholders," said Davis, whose company controls 13 percent of Bioenvision's stock. Davis said SCO is reviewing its legal options, but was surprised to find out a judge granted the request before it had a chance to intervene. Elliott Associates, which has also opposed the deal and controls 6.7 percent of Bioenvision's shares, declined to comment.
Genzyme and Bioenvision already work closely because they share the rights to clofarabine, a leukemia treatment. By purchasing Bioenvision, Genzyme would gain full control of the drug and potentially have more flexibility.
While some shareholders have held out for a higher offer, Genzyme has repeatedly said it won't raise its $5.60 per share bid. In a letter to Bioenvision's board, Genzyme said no other company has been willing to pay more and Bioenvision faces considerable risk if it remains independent.
Todd Wallack can be reached at twallack@globe.com.
