Avigen (AVGN) Stops Strategic Merger Discussions to Develop Plan for Liquidation; Fires CEO, CBO, General Counsel
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Avigen, Inc. (Nasdaq: AVGN) today announced that its Board of Directors has discontinued its strategic merger discussions and intends to develop a plan of liquidation following the special meeting of stockholders on March 27, 2009 if the BVF Nominees are not elected to the Board. The Board also announced that it reviewed the conditional offer from BVF Acquisition LLC and its affiliates to acquire all of the outstanding shares of Avigen. The Board, after a thorough review with management and its financial and legal advisors, is expressing no opinion and is remaining neutral with regard to the tender offer.
In taking a neutral stance on the tender offer, the Board noted the following:
- The Board believes that the offer price of $1.20 per share is approximately the company's current net cash value less wind down costs, but does not reflect the value for the company's other assets, including its AV411 pain and addiction program and rights to future payments from Genzyme Corporation.
- The Board recognizes the preference of some shareholders for immediate and certain liquidity.
- The Board believes it can deliver more than $1.20 per share from net cash assets less wind down costs, rights to approximately $6 million ($0.20 per share) of near-term Genzyme payments and the sale of AV411.
- BVF has stated that it intends to pursue a transaction with MediciNova, which the Board does not believe under the current terms would be in the best interests of stockholders.
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