It's not too often that shareholders argue against the likes of George Soros, but in this case Bioenvision (NDAQ:BIVN) investor Steven Rouhandeh believes the billionaire is way off the mark. The company continues to support (along with Soros' funds) a buyout offer from Genzyme valued at $345 million - or $5.60 per share - and it has many investors quite upset.

Rouhandeh maintains that the current offer of $5.60 per share is very inadequate, representing a value of less than one-times forward revenues. The activist shareholder also argued that the timing of the deal is highly unfavorable as it comes in advance of an anticipated approval of clofarabine in the adult AML indication.

Rather than selling the company now at such a low premium, Rouhandeh suggested five steps aimed at creating far more value for a potential sale at a much higher multiple in the twelve to eighteen months range. These steps include:

1. Let the tender offer terminate: The market clearly believes the current offer is inadequate with more than 30 million shares trading above the buyout price. The buyout price also comes at an insignificant premium of only 7% and is not comparable to other industry acquisition multiples.
2. Reduce the influence of Soros at the board level: George Soros and his affiliates have managed to control 67% of the company's voting power while only owning 12% of the company's shares. New independent board members could help reduce this unhealthy balance.
3. Augment management with the recent proceeds from financing: Add additional personnel and others to augment management and enhance the odds of success, particularly with its upcoming new drugs.
4. Strengthen business development efforts: Expand business development efforts through in-licensing or through the acquisition of complementary products and technologies. Also, expand partnering and out-licensing agreements to enhance global presence.
5. Enforce Bioenvision's rights: Genzyme appears to be monopolizing the agreement between the two parties when in fact it is Bioenvision that is licensing rights to Genzyme. Force Genzyme to share its data with Bioenvision to help enhance the drugs.

Clearly, the current offer on the table is not one that most investors are happy with; however, management and the company's largest shareholder seem to remain in favor of the deal. Unless Rouhandeh can convince enough shareholders otherwise, the deal could go through. However in the event that the deal falls through, this is definitely a stock to keep an eye on over the next year.

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