Biotech Grp: Corvas-Dendreon Deal Not In Hldrs Interests
Monday March 3, 6:02 pm ET
WASHINGTON (Dow Jones)--A group including Biotechnology Value Fund L.P. said it believes that Corvas International Inc.'s proposed acquisition by Dendreon Corp. (NasdaqNM:DNDN - News) isn't in the best interest of Corvas' shareholders and is unfair to shareholders financially.
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According to an amended Schedule 13D filed Monday with the Securities and Exchange Commission (News - Websites), the fund group holds a 19.8% stake in Corvas International, making it the company's largest shareholder.
The group, which said it has spoken with "a small number" of other " significant" Corvas International shareholders, said it believes that shareholders of a majority of the outstanding common shares of the company oppose the Dendreon deal.
"We believe it is highly unlikely that Corvas shareholders will approve the proposed transaction," the group said in a letter, dated Friday and addressed to Corvas International's board.
Biotechnology company Dendreon signed a definitive agreement Feb. 25 to acquire Corvas International in a stock swap. Dendreon would exchange 0.45 of a share for each Corvas International share. The companies have said they expect to close the deal in the second quarter.
The Biotechnology Value Fund group said it believes both companies would be " well served" by immediately and mutually canceling the deal without payment or penalty.
"We are extremely concerned about the ongoing erosion of Corvas' cash value," the letter said. "We call on the board to urgently intervene to stop this bleeding which, in our opinion, has gone on far too long."
Says Company Could Return $2.70 A Share
The group said it believes Corvas International should return as much cash as possible to shareholders.
"This could be accomplished through an immediate, tax-efficient distribution of substantially all of Corvas' cash, net of debt, to all shareholders," the letter said. "An expeditious sale or liquidation of the remaining assets could follow."
The group said that based on its calculations and publicly available information, it estimates current cash balances, net of debt, of at least $2.70 a share.
Shares of Corvas International closed Monday at $1.71, down 3 cents.
The group said it hasn't made any solicitation of proxies and doesn't intend to. It also doesn't intend to acquire control of the company.
Corvas International is a clinical-stage biopharmaceutical company.
-By Ben Siegel, Dow Jones Newswires; 202-628-7689 |
