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Bioenvision shareholders scupper Genzyme takeover bid

Genzyme lost a close shareholder vote last week to buy US-based biopharmaceutical company Bioenvision

Genzyme lost a close shareholder vote last week to buy US-based biopharmaceutical company Bioenvision.

Both biotechs have obtained a court order to reopen the polls this month to give shareholders yet another opportunity to approve the deal.

Genzyme already controls 22 per cent of Bioenvision's stock through a tender offer, while Bioenvision's board has voted to sell the rest of the company to Genzyme. Some shareholders, however, which include Elliott Associates and SCO Capital Partners, have complained that Genzyme's USD 5.60 per share offer is much too low.

On 10 October 2007, Bioenvision's shares were up USD 0.09 to rest at USD 5.55, or an increase of 1.7 per cent.

In last week's vote, Bioenvision won support of 47 per cent of total shares. Fifty per cent is needed for approval. The vote was extended until the morning of 12 October. The original vote fell short by 239,000 share votes, or less than 0.5 per cent of outstanding shares, according to court documents.

Bioenvision revealed that the deal would have passed by 2.8m votes, if it were able to include the votes of a JPMorgan client, who attempted to vote 43 minutes after Bioenvision's CEO Christopher Wood shut the polls.

Bioenvision and Genzyme have won permission from a Delaware court judge to reconvene the shareholder meeting on 22 October 2007.

Leukaemia treatment reason for buyout
In May 2007, Genzyme agreed to acquire Bioenvision for about USD 345m in cash to gain exclusive rights to clofarabine, a cancer treatment for children.

Genzyme insists it will not raise its share bid, despite Bioenvision shareholders delaying tactics. In a letter to Bioenvision's board, Genzyme stated that no other company has been willing to pay more.

Steven Rouhandeh, chairman of SCO Financial Group which opposes the merger, said the company would just have to wait and see what happened. He added that the meeting was the fourth time shareholders had voted on the deal, referring to Genzyme's original tender offer, which failed to garner a majority of Bioenvision shares. He also referred to an extension of the offer, the voting deadline and the finally completed vote.

"Our view is that this process has gone on long enough, and it should come to some kind of closure," declared Rouhandeh.

30th September 2008

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