A large Bioenvision, Inc. (NDAQ:BIVN) shareholder announced its opposition to the company's proposed $5.60/share buyout amid yet another solid earnings report, according to a Schedule 13D/A filing with the SEC. The move follows the lead of many other shareholders who are expected to collectively reject the bid next month.

SCO Capital Partners disclosed a 13.1 percent stake in Biovision along with a letter to the company's board of directors that called the proposed $5.60/share offer "extremely inadequate" and the result of a "poorly managed and ill-timed" sale process. The hedge fund insists that the company could fetch closer to $10/share in a competitive auction or sales process in 2008.

"We reiterate, as another shareholder has recently done publicly, that SCO will not vote for the Genzyme transaction at the current offer price," said fund manager Steven Rouhandeh in a statement. "In the alternative, SCO believes that the Bioenvision board of directors should be working on behalf of the common shareholders, like SCO, to maximize value for all shareholders."

SCO's plan for Biovision includes several components. First, the hedge fund intends to propose a new slate of directors at the next annual meeting. Secondly, the hedge fund believes that the company should retain key employees while seeking to augment management with new talent. Finally, the hedge fund wants to seek global control of Genzyme and seek a future exit through a competitive auction or sales process.

In the end, shareholders are fairly certain that Biovision's merger proposal will fall through (we can see this priced in now). Whether or not the company takes action to unlock value in other ways remains to be seen, but with a large shareholder like SCO backing new proposals, BIVN is a stock worth watching!

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