Genzyme and Bioenvision Win Court’s Permission to Reopen Voting on Troubled Merger Agreement
Am I the only one here who’s having disturbing flashbacks to November 2000? Remember those long weeks when otherwise rational people were driven to distraction trying to find an answer to the once seemingly simple question of who won the vote? We’ve been following Genzyme’s troubled bid to acquire New York-based Bioenvision for months now (see this story for a recent summary) and, though I’m the first to admit the stakes aren’t as high as those of a presidential election, I’d really just like to know who won.
Well, looks like that’s not going to happen today, or even next week. When last we heard from the two companies, on Friday, Bioenvision had closed voting on the proposed merger and adjourned a special meeting of its shareholders until today when, a spokesperson for the firm assured me, the results would be announced. But last night Bioenvision and Genzyme jointly petitioned the Delaware Court of Chancery for permission to reopen the polls until October 22 and, according to a shareholder who attended today’s meeting, Bioenvision says the court this morning granted the request.
So what’s the issue? Not hanging chads, at least not according to the court filing, but rather a mini comedy of errors that ultimately led to Bioenvision closing the vote at 11:29 a.m. on Friday thinking it had the majority needed to seal the deal, when in fact it was short by 239,000 votes, or 0.43 percent of its shares. At 12:11 p.m. Broadridge—which was charged with processing the proxies and votes by institutional investors—transmitted another shareholder’s proxy to the American Stock Transfer and Trust Company (AST), which was serving as the inspector of elections. Instructions for that vote—of 3.1 million shares in favor of the merger—were originally communicated to Broadridge at approximately 11:15 a.m., according to the filing, but Broadridge initially refused them. And since the votes ultimately arrived after the polls were closed they weren’t counted. For more on this chapter of the saga, see the court filing here. (Trust me, it’s an good read.)
“This whole process has really not served shareholder interest,” says Steven Rouhandeh, chairman of SCO Financial Group, one of the minority shareholders that has vehemently opposed the merger. “They keep taking a swing and a miss, right? Those votes came in after the deadline. So, we’ll see.”
For sanity’s sake, let’s hope it’s not December by the time we do.