Dive Brief:
- Oral delivery company Neos Therapeutics' share price has shot up by almost 38% on the news of a repeated unsolicited acquisition proposal from PDL BioPharma, and rose a further 2% after hours on Thursday.
- The all-cash offer of $10.25 puts a 40% premium on the drug delivery technology company's Oct. 25 share price, and isn't subject to any financing conditions.
- The offer will remain open for 14 days; the Neos board has said that it will review the proposal "to determine the course of action that it believes is in the best interest of the company and Neos shareholders."
Dive Insight:
PDL BioPharma, Inc is keen, and doesn't seem to be taking no for an answer. This offer follows an unsolicited proposal in June to acquire Neos Therapeutics, Inc for $10.25 per share in cash, which was unanimously rejected by the Neos board of directors as "not in the best interest of Neos shareholders."
A few days after this decision, Neos announced an underwritten public offering of $32.4 million of common stock at $6.25 a share, financing that PDL describes as "significantly dilutive."
PDL made the same offer again in July, at which time Neos entered into a confidentiality agreement with PDL, "to facilitate engagement and sharing of information between the companies." Despite the offer being 40.4% above the closing share price, Neos again rejected the offer, seeing it as undervaluing the company and not reflecting its strategic value.
"In making the determination to reject the July $10.25 per share proposal, the Neos board considered, among other things, that the company is successfully executing its strategy and the board believes management is well positioned to continue executing on this strategy to drive additional value creation in both the near and long-term," a Neos spokesperson said in a statement.
But hardly surprisingly, PDL disagrees; hence Thursday's public offer, which the company says it's a result of Neos' "refusal to negotiate in good faith toward a transaction in the best interests of Neos shareholders" and will allow "Neos shareholders [to] decide what is in their best interest."
PDL's business model is based around acquiring and managing a portfolio of companies, products, royalty agreements and debt facilities, and the company is increasingly concentrating on acquiring products and companies with a focus on "undercommercialized" products.
"Based on its due diligence, PDL's board of directors strongly believes that PDL's backing and substantial financial resources would greatly augment the performance of the Neos product portfolio and allow more patients to benefit from Neos' products. PDL… believes that the addition of PDL's greater resources will add substantial value to currently marketed treatments over a shorter period of time as well as accelerate the development of additional products."