Nabi Biopharma (NABI) Commences $23M Modified 'Dutch Auction' Common Tender
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Nabi Biopharmaceuticals (Nasdaq: NABI) is commencing a "modified Dutch auction" tender offer for up to $23,000,000 of its common stock at a price per share not less than $1.58 and not greater than $1.72. The tender offer will expire at 12:00 midnight, at the end of the day, New York City time, on Monday, July 30, 2012, unless extended by the Company. Tenders of shares must be made on or prior to the expiration of the tender offer and may be withdrawn at any time prior to the expiration of the tender offer, in each case, in accordance with the procedures described in the tender offer materials.
A "modified Dutch auction" tender offer allows stockholders to indicate how many shares and at what price within the Company's specified range they wish to tender. Based on the number of shares tendered and the prices specified by the tendering stockholders, the Company will determine the lowest price per share within the range that will enable the Company to purchase $23,000,000 of its common stock (or a lower amount if the offer is not fully subscribed). The Company also reserves the right to purchase up to an additional 2% of its shares outstanding without amending or extending the tender offer. All shares purchased by the Company in the tender offer will be purchased at the same price. The Company will not purchase shares below a stockholder's indicated price, and in some cases, the Company may actually purchase shares at a price that is above a stockholder's indicated price under the terms of the tender offer. Stockholders whose shares are purchased in the tender offer will be paid the determined purchase price in cash, less any applicable withholding taxes and without interest, after the expiration of the tender offer.
The Company expects to fund the share purchases in the tender offer using available cash on hand. The tender offer will not be conditioned upon any minimum number of shares being tendered, but will be subject to a number of conditions that are described in the tender offer materials.
In connection with the previously disclosed proposed transaction with Biota Holdings Inc. (the "Transaction"), the Company plans to return to its stockholders, before the completion of the Transaction, its remaining cash in excess of the $54 million required to be held by the Company at the completion of the Transaction after satisfying outstanding liabilities. Such distribution will take the form of the tender offer described in this press release and, for any remaining amounts, through a dividend or other return of capital. After the completion of the tender offer described in this press release but prior to the completion of the Transaction, the Company plans to declare a dividend or implement a return of capital, as applicable, to distribute any remaining cash in excess of the $54 million required to be held by the Company at the completion of the Transaction that is not required to satisfy any outstanding liabilities. Such remaining cash amount is currently expected to be in the range of approximately $2 million to $5 million. The Company has the right to terminate the tender offer described in this press release if the merger implementation agreement with Biota is terminated in accordance with its terms.
After the completion of the tender offer, in the event that the Transaction is not completed, the Company's Board of Directors will consider the liquidation and dissolution of the Company. If the Company's Board of Directors determines that liquidation and dissolution is advisable, it will approve a plan of liquidation and dissolution and submit it to the Company's stockholders for their approval. If the Company's Board of Directors recommends liquidation and dissolution to the stockholders, a meeting of the Company's stockholders to consider any proposed plan of liquidation and dissolution likely would not be held until approximately three or four months after the termination of the Transaction Agreement. Thereafter, if the plan is approved by stockholders, it will take the Company no less than three years to complete the dissolution and winding‑up process and distribute all remaining assets to stockholders in accordance with Delaware law.
Following stockholder approval of a plan of liquidation and dissolution and the filing of a certificate of dissolution with the Secretary of State of the State of Delaware but prior to the completion of the dissolution and winding‑up process, the Company likely will make one or more initial or interim liquidating distributions to its stockholders of a majority of its remaining cash assets, which distribution amounts will depend on known, unknown, contingent and pending claims at the time of the distributions. The Company currently estimates such initial or interim liquidating distributions to be approximately $1.42 to $1.59 per share in the aggregate (assuming the Company purchases 13,372,093shares in the tender offer, which is based on the tender offer being fully subscribed at the maximum purchase price per share, and no other changes to the Company's currently outstanding number of shares) or $1.48 to $1.66 per share in the aggregate (assuming the Company purchases 14,556,962shares in the tender offer, which is based on the tender offer being fully subscribed at the minimum purchase price per share, and no other changes to the Company's currently outstanding number of shares). The estimated range of the liquidating distributions described in the preceding sentence is based on the Company having cash of $92.7million as of June 30, 2012, less approximately $2.5 million of estimated operating expenses until September 30, 2012, less approximately $23.2 million to be used for purchasing shares in the tender offer described in this press release (including related fees and expenses), and less a reserve of approximately $20 million to $25 million in the aggregate to pay, and make provision for, existing and future contingent and potential claims and liabilities, including severance payments and transaction-related fees and liabilities, expenses related to continuing operations including making required regulatory filings and the establishment of a mechanism for collecting and distributing any future distributions, milestone or royalty payments under existing agreements with respect to NicVAX® (Nicotine Conjugate Vaccine) and Phoslyra® . The estimated reserve amount of approximately $20 million to $25 million in the aggregate includes approximately $5 million to $10 million to be set aside for the satisfaction of future contingent and potential claims and liabilities in accordance with Delaware law. The amount remaining from the $5 million to $10 million reserve, if any, together with any other remaining assets, after satisfying the Company's remaining, actual, contingent or potential claims and liabilities, will be distributed to the stockholders. The Company is currently unable to predict the precise nature, amount or timing of the liquidating distributions described above. The range of the liquidating distributions and the other amounts referred to in this paragraph are preliminary estimates based on the information currently available to the Company and are subject to change based on factors currently unknown to the Company that may affect its remaining cash in the future, such as additional expenditures and/or liabilities. Therefore, the actual amounts of the liquidating distributions may be significantly lower than the Company's current estimates.
Specific instructions and a complete explanation of the terms and conditions of the tender offer are contained in the offer to purchase and related materials mailed to stockholders beginning on July 2, 2012.
Morrow & Co., LLC will serve as information agent for the tender offer and American Stock Transfer & Trust Company, LLC will serve as the depositary for the tender offer.
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A "modified Dutch auction" tender offer allows stockholders to indicate how many shares and at what price within the Company's specified range they wish to tender. Based on the number of shares tendered and the prices specified by the tendering stockholders, the Company will determine the lowest price per share within the range that will enable the Company to purchase $23,000,000 of its common stock (or a lower amount if the offer is not fully subscribed). The Company also reserves the right to purchase up to an additional 2% of its shares outstanding without amending or extending the tender offer. All shares purchased by the Company in the tender offer will be purchased at the same price. The Company will not purchase shares below a stockholder's indicated price, and in some cases, the Company may actually purchase shares at a price that is above a stockholder's indicated price under the terms of the tender offer. Stockholders whose shares are purchased in the tender offer will be paid the determined purchase price in cash, less any applicable withholding taxes and without interest, after the expiration of the tender offer.
The Company expects to fund the share purchases in the tender offer using available cash on hand. The tender offer will not be conditioned upon any minimum number of shares being tendered, but will be subject to a number of conditions that are described in the tender offer materials.
In connection with the previously disclosed proposed transaction with Biota Holdings Inc. (the "Transaction"), the Company plans to return to its stockholders, before the completion of the Transaction, its remaining cash in excess of the $54 million required to be held by the Company at the completion of the Transaction after satisfying outstanding liabilities. Such distribution will take the form of the tender offer described in this press release and, for any remaining amounts, through a dividend or other return of capital. After the completion of the tender offer described in this press release but prior to the completion of the Transaction, the Company plans to declare a dividend or implement a return of capital, as applicable, to distribute any remaining cash in excess of the $54 million required to be held by the Company at the completion of the Transaction that is not required to satisfy any outstanding liabilities. Such remaining cash amount is currently expected to be in the range of approximately $2 million to $5 million. The Company has the right to terminate the tender offer described in this press release if the merger implementation agreement with Biota is terminated in accordance with its terms.
After the completion of the tender offer, in the event that the Transaction is not completed, the Company's Board of Directors will consider the liquidation and dissolution of the Company. If the Company's Board of Directors determines that liquidation and dissolution is advisable, it will approve a plan of liquidation and dissolution and submit it to the Company's stockholders for their approval. If the Company's Board of Directors recommends liquidation and dissolution to the stockholders, a meeting of the Company's stockholders to consider any proposed plan of liquidation and dissolution likely would not be held until approximately three or four months after the termination of the Transaction Agreement. Thereafter, if the plan is approved by stockholders, it will take the Company no less than three years to complete the dissolution and winding‑up process and distribute all remaining assets to stockholders in accordance with Delaware law.
Following stockholder approval of a plan of liquidation and dissolution and the filing of a certificate of dissolution with the Secretary of State of the State of Delaware but prior to the completion of the dissolution and winding‑up process, the Company likely will make one or more initial or interim liquidating distributions to its stockholders of a majority of its remaining cash assets, which distribution amounts will depend on known, unknown, contingent and pending claims at the time of the distributions. The Company currently estimates such initial or interim liquidating distributions to be approximately $1.42 to $1.59 per share in the aggregate (assuming the Company purchases 13,372,093shares in the tender offer, which is based on the tender offer being fully subscribed at the maximum purchase price per share, and no other changes to the Company's currently outstanding number of shares) or $1.48 to $1.66 per share in the aggregate (assuming the Company purchases 14,556,962shares in the tender offer, which is based on the tender offer being fully subscribed at the minimum purchase price per share, and no other changes to the Company's currently outstanding number of shares). The estimated range of the liquidating distributions described in the preceding sentence is based on the Company having cash of $92.7million as of June 30, 2012, less approximately $2.5 million of estimated operating expenses until September 30, 2012, less approximately $23.2 million to be used for purchasing shares in the tender offer described in this press release (including related fees and expenses), and less a reserve of approximately $20 million to $25 million in the aggregate to pay, and make provision for, existing and future contingent and potential claims and liabilities, including severance payments and transaction-related fees and liabilities, expenses related to continuing operations including making required regulatory filings and the establishment of a mechanism for collecting and distributing any future distributions, milestone or royalty payments under existing agreements with respect to NicVAX® (Nicotine Conjugate Vaccine) and Phoslyra® . The estimated reserve amount of approximately $20 million to $25 million in the aggregate includes approximately $5 million to $10 million to be set aside for the satisfaction of future contingent and potential claims and liabilities in accordance with Delaware law. The amount remaining from the $5 million to $10 million reserve, if any, together with any other remaining assets, after satisfying the Company's remaining, actual, contingent or potential claims and liabilities, will be distributed to the stockholders. The Company is currently unable to predict the precise nature, amount or timing of the liquidating distributions described above. The range of the liquidating distributions and the other amounts referred to in this paragraph are preliminary estimates based on the information currently available to the Company and are subject to change based on factors currently unknown to the Company that may affect its remaining cash in the future, such as additional expenditures and/or liabilities. Therefore, the actual amounts of the liquidating distributions may be significantly lower than the Company's current estimates.
Specific instructions and a complete explanation of the terms and conditions of the tender offer are contained in the offer to purchase and related materials mailed to stockholders beginning on July 2, 2012.
Morrow & Co., LLC will serve as information agent for the tender offer and American Stock Transfer & Trust Company, LLC will serve as the depositary for the tender offer.
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