Bioenvision Demands a Recount

Drug developer Bioenvision's (Nasdaq: BIVN) battle with some of its leading investors over its potential sale isn't over just yet.

Shareholder voting on Bioenvision's proposed acquisition by Genzyme (Nasdaq: GENZ) was scheduled to end last Thursday. With only 47% of shareholders voting in favor of the merger, including Genzyme's 22% stake, Bioenvision decided to hold the polls open one more day, in hopes that some stockholders who hadn't yet participated would vote for the deal. Non-votes were counted as nays on the merger.

Today, Bioenvision and Genzyme were supposed to announce the results of the shareholder proxy vote on the acquisition. Instead, in a cryptically worded press release, the potential newlyweds asked for another voting day later in October.

It's no stretch to assume that Bioenvision's management didn't get the extra 3% of shareholders it needed to confirm the acquisition. Bioenvision and Genzyme filed a petition in Delaware court to "reopen the polls." The court agreed to reconvene the meeting on Oct. 22, giving shareholders who abstained from voting another chance to vote on the merger.

Large institutional shareholders like SCO Capital have opposed the merger deal, calling Genzyme's $5.60-a-share offer too low. At least three independent proxy advisory firms have also judged the deal bad for shareholders.

This is just one example of the market's current spate of acquisition drama. Some suitors, like the private equity group that proposed to acquire Sallie Mae (NYSE: SLM), are trying to get out of deals. Others, like PDL BioPharma (Nasdaq: PDLI), are seeking prospective bidders. Investors fond of such shareholder action should now get to keep Bioenvision on their radar at least a little longer.