Pfizer looks like it may have Sanofi on the ropes in the battle for Medivation…

Expectation is high that today will see a formal announcement by Pfizer, which has tabled a USD 14bn offer for US biotech company Medivation. Medivation has been subject to rumours of takeover speculation since January 2014 and has seen most of the world’s leading pharmaceutical companies, including Novartis, Astra-Zeneca, Gilead, Amgen, Celgene and Merck, linked as possible suitors.

Sanofi upped the ante in this whole process at the end of April by submitting a non-binding hostile offer of USD 52.50 per share, valuing Medivation at just over USD 9.3bn. Medivation’s founder, David Hung, was quoted at the time as saying the Sanofi offer was a “substantially inadequate proposal” compared to value offered to shareholders by the group’s own strategic plan.

If Pfizer’s offer is confirmed, it will value Medivation’s shares at around USD 80.00 per share, providing a significant premium to Medivation’s shareholders on the original offer from Sanofi. If the deal does proceed it will be the third biggest global pharmaceutical deal by value either announced or completed in 2016 to date and would be Pfizer’s second multi-billion dollar acquisition of 2016, after their USD 5.2bn acquisition of Anacor Pharmaceuticals in June. Following Pfizer’s thwarted attempt to acquire Allergan earlier this year, this deal, on the face of it, looks like it would satisfy shareholders and government regulators alike.